SEC’s Stablecoin Surprise: A Modest 2% Trim for the Ton

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Pray, allow me to impart the latest tidings from the Securities and Exchange Commission, an institution not typically renowned for its levity or generosity. In a move that has sent ripples through the parlors of broker-dealers, the SEC has deigned to reduce the capital “haircut” on qualifying payment stablecoins from a draconian 100% to a mere 2%. How very magnanimous of them!

  • The SEC, in its infinite wisdom, has issued a new FAQ wherein its staff condescends to “not object” should broker-dealers apply a 2% capital haircut to these stablecoins, a marked improvement from the previous 100% deduction. How kind of them to permit such extravagance!​
  • This benevolent shift follows the GENIUS Act, which, in its sagacity, aligns compliant stablecoins with the most conservative of money market funds. Henceforth, $100 of tokens shall be deemed worthy of $98 toward net capital. A veritable triumph of modern finance!​
  • Meanwhile, in the wild realm of cryptocurrencies, BTC lingers near $68.1k with a volume of ~$33B, ETH hovers around $1.96k on ~$18B, and USDT steadfastly clings to $1 with a 24-hour turnover of $57B-$68B, the paragon of dollar-linked stablecoins.

The Securities and Exchange Commission, in a rare display of leniency, has quietly bestowed upon the market one of its most amiable gestures yet. By slashing the capital “haircut” on stablecoins from 100% to a mere 2%, it has effectively declared that $100 of approved stablecoins may now be considered $98 toward a firm’s net capital. How very progressive! One might almost imagine the SEC as a benevolent aunt, albeit one with a penchant for excessive rule-making.

In a new FAQ from the Division of Trading and Markets, the agency’s staff has graciously consented to “not object” should a broker-dealer apply a 2% haircut on proprietary positions in a payment stablecoin when calculating its net capital. Commissioner Hester Peirce, a champion of more tolerable rules for tokenization and settlement, hailed this as a long-overdue correction to a system that had rendered stablecoin balances “worthless for net capital purposes.” Until now, firms had been compelled to assume a 100% deduction, a practice that rendered on-chain settlement as economically viable as a ball gown in a rainstorm.

Market lawyers and trading desks, ever the optimists, view this move as a direct consequence of last year’s GENIUS Act, which established reserve and oversight standards for stablecoin issuers. “This is a big deal,” proclaimed Prof. Tonya Evans on X, noting that “stablecoins are now treated like money market funds on a firm’s balance sheet.” Others suggest that this guidance, coupled with the SEC’s updated crypto FAQ, paves the way for a deeper integration between traditional market structures and on-chain liquidity. How thrilling!

Major Cryptocurrencies Trade Sideways

This development arrives amidst a maturing macro backdrop for digital assets. Bitcoin (BTC) trades near $68,100, with a 24-hour range of approximately $65,600-$68,300 on about $33B in turnover. Ethereum (ETH) exchanges hands around $1,960, after a 24-hour low near $1,914 and a high close to $1,980, with roughly $18B in volume. Tether (USDT) maintains its peg near $1.00, with a 24-hour trading volume of about $57B-$68B, reigning as the largest dollar-linked stablecoin by market depth. This parabolic move occurs as digital assets continue to serve as the purest barometer of macro risk appetite.

Policy observers anticipate that this haircut decision will fuel upcoming debates over broader crypto market-structure legislation, including the CLARITY Act and other efforts slated for as early as this summer. For broker-dealers, the message is clear: the SEC is finally permitting stablecoins to reside within the regulated framework, rather than relegating them to the periphery. How very enlightened of them!

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2026-02-20 15:14