U.S. Securities and Exchange Commission (SEC) issued updated staff guidance that significantly eases the treatment of certain stablecoins under broker-dealer capital rules, making them far more attractive for integration into traditional finance (TradFi).
The SEC’s Division of Trading and Markets added clarification to its Frequently Asked Questions Relating to Crypto Asset Activities and Distributed Ledger Technology. Specifically, under Exchange Act Rule 15c3-1 (the broker-dealer net capital rule), staff stated they would not object if broker-dealers treat proprietary positions in qualifying payment stablecoins as having a “ready market” and apply only a 2% haircut when calculating net capital.
A haircut is a percentage deduction from an asset’s market value to account for risk in net capital computations which ensure firms have a liquidity buffer to protect customers. Previously, many broker-dealers conservatively applied a 100% haircut to stablecoins out of caution since Rule 15c3-1 didn’t explicitly address them, meaning those holdings effectively counted as zero toward required capital—making it costly or impractical to hold them.
The new 2% haircut aligns payment stablecoins with low-risk assets like money market funds, which face similar treatment (cash gets 0%, while ultra-safe instruments get minimal deductions). SEC Commissioner Hester Peirce released a supporting statement titled “Cutting by Two Would Do”, explaining that a 100% haircut was “unnecessarily punitive” given stablecoins’ backing typically U.S. dollars, short-term Treasuries, etc.
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She noted this change enables broker-dealers to more feasibly participate in tokenized securities, on-chain settlements, and other crypto-related activities, and she invited input on potential future amendments to Rule 15c3-1. The guidance defines qualifying payment stablecoins with reference to the GENIUS Act which sets strict reserve, redemption, and attestation standards—making compliant ones even more conservative than some money market fund assets.
This quiet but impactful shift—via a simple FAQ update rather than formal rulemaking—reduces capital penalties dramatically like $10 million in qualifying stablecoins now deducts only ~$200,000 vs. the full amount before, unlocking liquidity, lowering barriers for Wall Street firms to hold and use stablecoins, and accelerating their role in bridging crypto and TradFi.
Analysts see it as a big step toward broader institutional adoption of tokenized assets and blockchain-based finance. By allowing a 2% haircut instead of the conservative 100% haircut many firms had applied, it dramatically lowers the capital cost of holding these assets, treating them similarly to money market funds which also face a 2% haircut on comparable low-risk holdings like short-term Treasuries and cash equivalents.
This change builds directly on the GENIUS Act which established a federal framework for payment stablecoins with strict requirements: 100% reserves in high-quality liquid assets (U.S. dollars, short-term Treasuries, etc.), redemption at par, public policies, monthly attestations by registered accountants, and prioritization of holders in insolvency.
Post-GENIUS, compliant issuers face even stricter standards than government money market funds in some respects, providing regulatory comfort for the SEC’s lighter touch. Previously, a 100% haircut meant stablecoin holdings contributed zero to a broker-dealer’s net capital buffer, making them expensive or impractical to hold in inventory.
Now, only 2% is deducted; $10 million in qualifying stablecoins deducts just ~$200,000 vs. the full amount before. This frees up balance sheet capacity, reduces opportunity costs, and makes stablecoins viable as treasury-like assets or settlement tools without distorting capital ratios. Accelerated Institutional Adoption and Wall Street Participation
Major broker-dealers can now more feasibly hold, custody, trade, or use stablecoins in proprietary positions. This lowers barriers for integrating stablecoins into TradFi operations, such as: On-chain settlements for tokenized securities. Cross-border payments or repo-like transactions. Liquidity provision in tokenized asset markets.
Analysts describe it as a “quiet regulatory green light” that could reshape tokenized markets by enabling regulated intermediaries to bridge crypto and traditional systems more efficiently. This is staff-level guidance (not formal rulemaking), so it’s interpretive and could evolve. It applies only to proprietary positions in qualifying payment stablecoins.
The haircut applies to the greater of long or short positions (not netted), so directional bets still carry some charge. Non-qualifying stablecoins likely remain subject to higher/100% haircuts. Broader crypto risks aren’t eliminated—firms must still comply with other rules.
This is viewed as one of the most significant pro-crypto moves from the SEC in recent years under its evolving approach It reduces friction for institutional players to adopt stablecoins, accelerates the convergence of TradFi and crypto, and positions compliant stablecoins as a core infrastructure layer for next-generation finance.