Circle has urged the U.S. Securities and Exchange Commission to recognize qualifying payment stablecoins as cash in its proposed crypto fundraising rules and cut their broker-dealer capital haircut from 2% to zero.
Summary
- Circle wants GENIUS-compliant stablecoins recognized as cash for payments under the SEC’s proposed framework.
- A zero haircut would replace the current 2% staff treatment for qualifying broker-dealer positions.
- Hyperliquid Policy Center’s separate filing targets airdrops, secondary trading, safe-harbor access and automated buybacks.
- Arc’s validator structure features in Circle’s request for clearer treatment of ongoing technical services.
Circle’s October 28 blog outlined a comment letter filed on October 20, the consultation’s closing date. The USDC issuer supports Regulation Crypto Assets, while seeking explicit rules for stablecoin payments and settlement.
Circle seeks cash treatment for stablecoin payments
In its letter, the company asks the SEC to coordinate the proposal with the GENIUS Act and permit only GENIUS-compliant payment stablecoins as consideration or settlement assets under the framework.
The filing separates the token being offered from the stablecoin used to pay for it. Accepting stablecoins, Circle argues, should not pull their issuers into the fundraising company’s obligations.
For qualifying dollar tokens redeemable one-for-one, the requested valuation would use the corresponding dollar amount. Circle wants consistent treatment when payments count toward offering limits and when issuers rely on provisions for securities offered for cash.
In the blog, the issuer framed its position around “a clear, technology-neutral framework for onchain capital formation.”
The SEC’s August 18 proposal would create two fundraising exemptions. One would allow qualifying offerings of up to $5 million over four years; the other would permit up to $75 million within 12 months.
According to the agency’s announcement, both routes would require disclosures. The larger exemption would require financial statements and continuing reports, while antifraud and antimanipulation protections would remain applicable.
Broker-dealer capital rules already allow a 2% haircut
SEC staff addressed payment stablecoins in a February 19 FAQ, stating that it would not object to a broker-dealer applying a 2% haircut to qualifying proprietary positions when calculating net capital.
A haircut reduces the value recognized in that calculation. The guidance applies to the market value of the greater of a broker’s long or short proprietary stablecoin position.
Commissioner Hester Peirce supported the staff’s approach in a statement published that day, linking stablecoin use to broker-dealers’ ability to handle tokenized securities and other crypto assets.
“At the Commission level, I would like to consider how Rule 15c3-1 could be amended to account for payment stablecoins,” Peirce said.
Circle’s blog calls for reducing the haircut to zero, subject to objective safeguards. It seeks appropriate accounting and customer-reserve treatment, alongside the offering-rule clarification.
The letter says companion reforms should be coordinated with Regulation Crypto Assets. Recognition under the proposed offering rules would not itself settle how stablecoins qualify in broker-dealer customer-reserve accounts.
Hyperliquid’s filing focuses on token distributions and trading
A separate October 19 submission from Hyperliquid Policy Center sought five rule changes covering airdrops, secondary trading, developer protections, automated buybacks and state securities requirements, as crypto.news previously reported.
The organization’s announcement asks the SEC to clarify whether onchain protocols and other intermediaries can facilitate secondary trading of tokens distributed under the exemptions.
Its safe-harbor concern centers on projects that cannot certify an investment contract has ended because their lawyers concluded one never existed. The group argues that the proposed certification could expose such projects to liability.
The SEC’s proposal includes a conditional safe harbor under which a crypto asset would no longer be subject to an investment contract once the applicable requirements are satisfied.
Circle wants validator maintenance treated as technical work
Circle’s blog asks the SEC to clarify that maintaining a known validator set after a network becomes functional does not constitute essential managerial efforts. It requests protection for technical roadmaps so developers can keep improving functioning networks.
The company identified Arc in its discussion of permissionless networks. Circle launched Arc’s mainnet on September 16 with USDC transaction fees, institutional validators, and tokenized funds available from launch.
Circle described the network as supporting Ethereum-compatible applications and settlement in under one second. Its validator group included BlackRock, DTCC, Visa, Mastercard and Standard Chartered.
In Europe, the issuer has pursued changes to reserve requirements. On October 2, it urged the European Commission to replace deposit thresholds under MiCA with liquidity requirements.
Its submission challenged requirements for at least 30% of reserves to sit in commercial bank deposits, rising to 60% for significant issuers.
