Circle Wants the SEC to Count Stablecoins as Cash, Haircut and All

Circle is pushing the SEC to make qualifying payment stablecoins behave like cash inside the agency's proposed crypto-asset rulebook. The company laid out its position in a comment letter submitted October 20, summarized publicly on October 28, according to NewsBTC. The asks are technical, but they carry real weight for how tokenized markets actually settle.

Two of the requests stand out. Circle wants qualifying payment stablecoins recognized under proposed Rule 302(b) for cash treatment, and it wants the broker-dealer haircut on those tokens reduced to zero, down from 2%, with safeguards attached. It also asks the SEC to coordinate its proposed Regulation Crypto Assets with the GENIUS Act on how stablecoins can be used as consideration and settlement assets.

A haircut is a deduction applied when an asset gets counted in a financial calculation. Shave it from 2% to nothing and an intermediary can squeeze more use out of the same balance sheet — without the token itself changing at all. That's why two instruments that look identical in daily use can cost a firm very different amounts once the rules recognize them differently.

Circle also wants clarity on the technical work that keeps a blockchain running after launch. Specifically, whether routine repairs and software updates should be treated differently from the managerial efforts that built the original investment proposition in the first place. A rulebook has to account for ongoing maintenance without pretending every patch carries the same economic meaning as an issuer's promises to buyers.

None of this is law. The letter is one interested party's preferred outcome, and a final proposal can drift a long way from what an issuer asks for. The SEC hasn't adopted the zero-haircut or cash-treatment positions, and anyone claiming qualifying stablecoins already have them under the proposal is getting ahead of the record. The next real signal would be formal SEC action or a revised proposal.