SEC Issues 2% Stablecoin Capital Guidance, Softening Regulatory Pressure on Institutional Exposure

SEC signals regulatory clarity for payment stablecoins, allowing broker-dealers to apply a 2% net capital haircut and paving the way for broader tokenized securities activity under existing rules.

SEC Clarifies Broker-Dealer Treatment of Payment Stablecoins Under Net Capital Rule

The U.S. Securities and Exchange Commission (SEC) Division of Trading and Markets issued a new FAQ on Feb. 19 on crypto asset activities. The guidance addressed payment stablecoins under broker-dealer financial responsibility rules. Commissioner Hester M. Peirce expressed support and invited public input.

Commissioner Peirce stated:

“The FAQ provides that the staff would not object if a broker-dealer were to apply a 2% haircut on proprietary positions in a payment stablecoin when calculating its net capital. I appreciate the staff’s approach.”

She also stated: “ Stablecoins are essential to transacting on blockchain rails. Using stablecoins will make it feasible for broker-dealers to engage in a broader range of business activities relating to tokenized securities and other crypto assets.”

The Division of Trading and Markets issued the FAQ to clarify how broker-dealers may treat proprietary positions in payment stablecoins under Exchange Act Rule 15c3-1, commonly known as the net capital rule. The staff indicated it would not object to a 2% haircut when firms calculate net capital, providing additional certainty as regulated entities evaluate tokenized securities and other blockchain-based financial products. The clarification outlines how existing capital standards can apply to payment stablecoins within the current regulatory framework governing broker-dealer financial responsibility.

The Division detailed its views on broker-dealer custody requirements, capital treatment, transfer agent registration, national securities exchange and alternative trading system operations, clearing and settlement functions, and exchange-traded products linked to crypto assets. The staff emphasized that the responses reflect staff views only, carry no legal force or effect, do not amend applicable law, and create no new obligations.

The document explains how Rule 15c3-3 applies to crypto asset securities, clarifies that compliance with the Commission’s 2020 special purpose broker-dealer statement is not mandatory, addresses how the Securities Investor Protection Act of 1970 and Securities Investor Protection Corporation protections apply to certain crypto assets, and outlines circumstances under which distributed ledger technology may be used for transfer agent recordkeeping.

Peirce further stated:

“At the Commission level, I would like to consider how Rule 15c3-1 could be amended to account for payment stablecoins.”

She welcomed feedback from market participants about potential modifications to the rule and invited input on other aspects of the SEC’s regulations that they believe should be updated to address the use of payment stablecoins by SEC-registered entities.

FAQ ⏰

• What did the SEC say about payment stablecoins under the net capital rule?
  SEC staff said they would not object to broker-dealers applying a 2% haircut to proprietary positions in payment stablecoins when calculating net capital.
• How does Exchange Act Rule 15c3-1 apply to payment stablecoins?
  The guidance clarifies that existing net capital standards can apply to payment stablecoins within the current broker-dealer regulatory framework.
• Does the SEC’s crypto FAQ create new legal obligations for broker-dealers?
  No, the staff stated the FAQ reflects staff views only and creates no new obligations or amendments to applicable law.
• What changes to Rule 15c3-1 did Hester Peirce suggest?
  Peirce said she would like the Commission to consider amending Rule 15c3-1 to better account for payment stablecoins.