Circle Seeks Zero SEC Staff Haircut for GENIUS Act-Compliant Payment Stablecoins

Circle Internet Group is asking the Securities and Exchange Commission to eliminate a 2% staff capital haircut for payment stablecoins that comply with the GENIUS Act, subject to objective safeguards.

Circle, the issuer of USD Coin (USDC), submitted the request in a comment letter dated Oct. 20 and disclosed it Oct. 28. The letter came on the comment deadline for the SEC’s proposed Regulation Crypto Assets, which remains at the proposal stage.

The proposed regulation would create exemptions for certain crypto-asset investment-contract offerings: one covering up to $5 million over four years, and another covering up to $75 million in each 12-month period. Permitted payment stablecoins already count toward those limits. Circle wants the SEC to clarify that qualifying payment stablecoins also count as cash under proposed Rule 302(b), allowing issuers to use the cash treatment for an offering. It also argues that a dollar stablecoin redeemable one-for-one should be valued at its dollar amount, rather than appraised as noncash consideration solely because payment occurs on-chain.

The capital request concerns a separate SEC staff position. On Feb. 19, 2026, SEC Trading and Markets staff said it would not object to a broker-dealer using a 2% net-capital deduction for qualifying payment stablecoins, calculated on whichever of its proprietary long or short positions had the greater market value. The position is staff guidance, not a binding SEC rule. The 2% rate is not a universal mandate; it reflects the conditions in the staff’s no-objection position for specified proprietary holdings.

For example, a 2% haircut on a $1 billion position would reduce the value counted in that calculation by $20 million. Circle seeks a zero haircut for payment stablecoins compliant with the GENIUS Act, subject to objective safeguards.

Circle also asks whether qualifying payment stablecoins can count as cash or otherwise qualify as eligible assets in customer-reserve accounts under Rule 15c3-3. Circle also seeks guidance on the financial-reporting circumstances in which payment stablecoins meeting GENIUS Act requirements could be treated as cash.

Those requests involve separate provisions, and Circle says capital and reserve changes require their own SEC action. “These companion reforms should be coordinated with, not inferred from, Regulation Crypto Assets,” the company wrote. The SEC’s broader crypto-assets rulemaking remains a proposal.