The "Stablecoin Revolution" on the Balance Sheet: SEC Uses "2% Discount" to Tear Open a Gap for Digital Asset Compliance
- Core Viewpoint: The U.S. SEC, by issuing guidance that allows broker-dealers to apply only a 2% capital haircut to eligible payment stablecoins, has taken a key step in integrating stablecoins into the mainstream financial system, signaling a shift in regulatory attitude from confrontation to integration.
- Key Elements:
- SEC staff agreed to significantly reduce the capital calculation haircut for payment stablecoins from a punitive 100% to just 2%, placing them on par with money market funds and lowering the holding costs for regulated entities.
- This move aims to bridge the gap between the legislative framework of the proposed GENIUS Act and the SEC's existing rules, clearing regulatory hurdles for the use of stablecoins in businesses like tokenized securities settlement.
- The guidance is forward-looking, allowing broker-dealers to treat stablecoins as legitimate trading instruments under existing state-level standards even before the GENIUS Act fully takes effect.
- The SEC is systematically replacing enforcement actions with rule-based guidance and is publicly soliciting comments on revising rules such as net capital, seeking to incorporate stablecoins more systematically into the regulatory framework.
- This policy helps regulated intermediaries offer stablecoin-based services, potentially making inclusive financial services like cross-border payments available to investors through safer, more trusted channels.
Original Author / Tonya M. Evans
Compiled by / Odaily Golem (@web3_golem)
On February 19, the U.S. Securities and Exchange Commission's (SEC) Division of Trading and Markets released a new FAQ, clarifying how broker-dealers should treat payment stablecoins under the net capital rule. Subsequently, SEC Crypto Assets Working Group Chair Hester Peirce issued a statement titled "Cutting Two Would Do".
Peirce stated that SEC staff would not object if broker-dealers applied a "2% haircut" to their proprietary positions in eligible payment stablecoins when calculating net capital, instead of a punitive 100% haircut.
While this may sound esoteric, this accounting adjustment could be one of the most impactful steps taken to practically integrate digital assets into the mainstream financial system since the SEC began softening its stance on crypto in early 2025.
Minimum Net Capital and Haircuts
To understand why, we need to grasp what a "haircut" means in the broker-dealer world.
Under Rule 15c3-1 of the Securities Exchange Act, broker-dealers must maintain minimum net capital—or more precisely, a liquidity cushion—to protect clients if the firm gets into trouble. When calculating this cushion, firms must apply "asset haircuts" to different assets on their books, reducing their carrying value to reflect risk. Thus, riskier or more volatile assets receive larger haircuts, while cash does not.
Previously, some broker-dealers self-imposed a 100% haircut on stablecoins, meaning these holdings were completely excluded from their capital calculations. This made holding stablecoins prohibitively expensive and financially unsustainable for regulated intermediaries.
Now, the 2% haircut fundamentally changes this calculus, placing payment stablecoins on par with money market funds holding similar underlying assets like U.S. Treasuries, cash, and short-term government bonds.
As Peirce pointed out, under the GENIUS Act, the reserve requirements for approved stablecoin issuers are actually stricter than the "eligible securities" requirements for registered money market funds, including government money market funds. In her view, a 100% haircut was overly punitive given the actual backing assets of these instruments.
This is crucial because stablecoins are the "lifeblood" of on-chain transactions. They are how value moves on blockchains and the prudent engine powering trades, settlements, and payments.
If broker-dealers cannot hold these tokens without draining their capital positions, they cannot effectively participate in tokenized securities markets, facilitate the creation of physical exchange-traded products (ETPs), or provide the integrated crypto and securities services institutions increasingly demand.
The "2% Haircut" Statement is Timely
The timing of this "2% haircut" announcement is critical.
The GENIUS Act, signed by President Trump on July 18, 2025, created the first comprehensive federal framework for payment stablecoins. The Act established reserve requirements, a licensing process, and oversight for stablecoin issuers, bringing them under a regulatory framework that distinguishes payment stablecoins from other digital assets.
The Federal Deposit Insurance Corporation (FDIC) is currently implementing an application process for insured depository institutions to issue payment stablecoins through subsidiaries. The Office of the Comptroller of the Currency (OCC) is also building its own framework. In short, federal regulators are racing against the clock to finalize key implementation rules by the July 2026 deadline.
Peirce's statement and its accompanying FAQ effectively bridge the gap between the GENIUS Act's legislative framework and the SEC's own rulebook.
The FAQ's definition of "payment stablecoin" is deliberately forward-looking: before the GENIUS Act's effective date, it relies on existing state-level regulatory standards, such as state money transmitter licenses, requirements consistent with the Act's reserve rules, and monthly attestation reports from CPA firms. After the Act takes effect, the definition will shift to the Act's own standards.
This dual-track approach means broker-dealers don't have to wait for the full implementation of the GENIUS Act to start treating stablecoins as legitimate trading instruments.
Peirce also indicated that the staff guidance is just the beginning. She invited market participants to comment on how to formally amend Rule 15c3-1 to incorporate payment stablecoins and solicited input on other SEC rules that may need updating. This open call for feedback suggests the Commission is considering more than just a one-off FAQ, but a more systematic integration of stablecoins into its regulatory regime.
A Policy of Regulatory Precision
Since the formation of the Crypto Assets Working Group under then-Acting Chair Mark Uyeda in January 2025, the SEC has been systematically unwinding the enforcement-heavy approach of former Chair Gary Gensler's tenure.
For example, the SEC has issued guidance on broker-dealer custody of crypto assets, clarifying that crypto asset securities need not be in paper form to satisfy control requirements, allowing broker-dealers to assist in the creation and redemption of physical ETPs, and outlining how alternative trading systems can support crypto pair trading.
Furthermore, the FAQ page containing today's stablecoin guidance has evolved into a comprehensive resource covering everything from transfer agent obligations to the Securities Investor Protection Corporation's (SIPC) protection (or lack thereof) for non-security crypto assets. The practical, direct impact for the traditional financial services industry is significant:
- Banks and broker-dealers evaluating entry into the digital asset space now have greater clarity on how their stablecoin holdings will be treated for capital purposes.
- Firms previously hesitant due to the operational cost of maintaining large positions (which ultimately netted to zero on the balance sheet) can now reconsider.
- Custodians, clearing firms, and alternative trading system (ATS) operators exploring tokenized securities settlement now know the settlement asset (stablecoins) won't be viewed as a regulatory burden.
The downstream effects for everyday investors, especially those historically underserved by traditional finance, are equally important. The International Monetary Fund (IMF) has noted that stablecoins have proven their utility in cross-border payments, as savings vehicles in emerging markets, and as channels for broader financial participation.
When regulated intermediaries can hold and transact in stablecoins without incurring massive capital penalties, more of these services can be offered through trusted, regulated channels rather than through unregulated offshore platforms where consumer risk is higher.
Federal vs. State Friction Continues
Of course, none of this exists in a vacuum, and friction between federal and state governments persists. The GENIUS Act's implementation timeline is aggressive. State regulators must have their regulatory frameworks certified by July 2026.
Consumer fraud protection concerns raised by figures like New York Attorney General Letitia James remain unresolved. The interplay between federal and state regulation will inevitably create friction. Furthermore, broader market structure legislation aimed at clarifying which digital assets are securities and which are commodities remains pending in the Senate.
Thus, the 2% haircut, however seemingly minor or obscure, represents something deeper: a federal securities regulator actively adapting existing rules to accommodate stablecoins as functional financial instruments, not just tolerate them at the margins.
Whether this adaptation can keep pace with the market, and whether the GENIUS Act's implementation lives up to its promise, remains to be seen. But in the journey from regulatory hostility to regulatory integration, it is this technical, often unseen work that determines whether policy translates into practice.
