| What to Know: – SEC allows 2% haircut on qualifying stablecoin proprietary holdings for net capital. – Replaces punitive 100% deduction, significantly improving broker-dealer capital efficiency. – Guidance, not rule; limited to proprietary positions, excluding customer asset treatment. |
According to the Division of Trading and Markets, broker-dealers may apply a 2% haircut to proprietary holdings of qualifying payment stablecoins when calculating SEC Rule 15c3-1 net capital. The change recognizes that certain tokens can operate as cash equivalents when supported by highly liquid, low-risk reserves. That stands in contrast to the 100% treatment that had been used in practice by firms, as reported by PANews Lab.
The impact on capital efficiency is material. For example, a $100 million proprietary position in a qualifying payment stablecoin would incur a $2 million deduction at a 2% haircut instead of a $100 million deduction at 100%. That frees up regulatory capital, potentially making on-chain settlement and treasury operations more feasible for registered broker-dealers.
The clarification arrives as staff guidance rather than a formal rule change and could be revised, according to CoinEdition. Firms therefore may treat the 2% approach as permissible under current staff views while maintaining documentation that the treatment is contingent on ongoing eligibility and supervisory review.
The scope is limited to proprietary positions and does not extend to customer assets or all digital asset activities, as reported by InsightsWire. In practice, that means broker-dealers should separately evaluate customer-related arrangements and ensure they remain compliant with customer protection rules.
Determining eligibility centers on whether a token functions as a payment stablecoin with conservative, transparent reserves and robust redemption mechanics. Analysts have cited factors including reserve asset quality, issuer transparency, and par-value redemption policies as gating items, according to Bitget News. Independent attestations or comparable disclosures are also viewed as important to evidence reserve sufficiency and liquidity.
From an implementation perspective, firms may consider documenting: the issuer’s reserve composition and frequency of attestations; operational redemption timelines and agents; legal terms that govern redemption rights; and concentration limits across issuers. Controls that map stablecoin eligibility to the 2% haircut should be embedded in capital schedules, reconciliations, and supervisory procedures. Exception handling and escalation, especially during market stress or if disclosures lapse, can help sustain eligibility.
Commissioner Hester M. Peirce has framed the 2% level as aligning payment stablecoins with money market fund-like risk profiles and criticized the previous approach. She described the prior 100% treatment as “unnecessarily punitive.”
As contextual background, Coinbase Global, Inc. (COIN) was quoted at $164.81 after-hours at the time of this writing, based on data from NasdaqGS. This market snapshot is descriptive only and may reflect delayed reporting.
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