• SEC allows broker-dealers to take 2% ‘haircut’ on stablecoins Staff said the US regulator would “not object” to broker-dealers counting stablecoin holdings toward their net capital requirements. • Cointelegraph in your social feed The US Securities and Exchange Commission (SEC) staff last week clarified that broker-dealers can apply a 2% “haircut” to their stablecoin holdings without objection from the SEC. • Previously, broker-dealers were uncertain whether to apply a 100% haircut to theirdollar-pegged stablecoins, meaning that they did not count the tokens toward their net capital under existing regulations. • The clarification came in the form of apostingby the staff of the SEC’s Division of Trading and Markets as a “Frequently Asked Questions Relating to Crypto Asset Activities and Distributed Ledger Technology.” In response, Commissioner Hester Peircesaid: In my view, a 100% haircut would be unnecessarily punitive given the underlying reserve assets that back payment stablecoins." The SEC requires broker-dealers to maintain minimum levels of net capital to meet financial obligations and absorb potential losses from market downturns and volatility,accordingto the staff’s clarification. • For example, if a broker-dealer holds $100 million in stablecoins, a 2% haircut allows them to count $98 million toward their net capital requirements. • Celebrating the clarification as positive for the financial system, Peircesaid: The clarification means broker-dealers can hold stablecoins without worrying about excess net capital requirements, and can treat the tokens similarly to money market funds, vehicles that hold low-risk cash equivalents like US Treasurys and certificates of deposit.

Article Summaries:

  • The SEC’s staff has clarified that broker‑dealers may apply a 2 % “haircut” to their dollar‑pegged stablecoin holdings, rather than the previously uncertain 100 % haircut. The guidance, posted as a FAQ by the Division of Trading and Markets, allows firms to count 98 % of stablecoin balances toward their net‑capital requirements, treating the tokens similarly to money‑market funds. Commissioner Hester Peirce praised the move as “unnecessarily punitive” and said stablecoins are essential for blockchain‑based trading. The clarification is seen as a boost for broker‑dealers’ ability to engage in tokenized securities and other crypto activities without eroding capital ratios.

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