SEC Allows Broker-Dealers to Count Stablecoins as Regulatory Capital
- Broker-dealers can now count stablecoin holdings at a value of 98% instead of the previous zero, as per SEC’s updated FAQ.
- This change applies to stablecoins like Circle’s USDC and Tether’s USDT, aligning them with money market funds on balance sheets.
- The SEC’s new guidance aims to reduce uncertainty for firms operating under current securities laws.
- Prior regulations imposed a full haircut (100%) on stablecoin holdings, penalizing broker-dealers financially.
- SEC Commissioner Hester Peirce indicated this shift could enable broker-dealers to engage more broadly in tokenized securities business activities.
The SEC’s adjustment allows broker-dealers to treat their stablecoin assets as regulatory capital, potentially enhancing liquidity and settlement processes in tokenized finance. This marks a significant shift from previous regulations that discouraged the custody of these digital assets.
With the new policy, firms can now count stablecoins towards their capital requirements, significantly changing how they manage these assets (Source).
