SEC guidance lets broker-dealers apply a 2% haircut to stablecoin holdings
SEC narrows capital friction for broker-dealers using stablecoins
A staff FAQ from the U.S. Securities and Exchange Commission's Division of Trading and Markets says the agency will not object to broker-dealers taking a 2% haircut on their own stablecoin holdings used for collateral and capital calculations. This guidance targets the customer-protection rule that forces firms to keep a buffer for client assets and clarifies how firms may account for tokenized cash equivalents.
The move replaces a patchwork of firm practices that, in some cases, had required firms to apply crippling haircuts — in one example cited by industry analysts some brokers treated stablecoins as fully ineligible for capital relief, effectively a 100% haircut. That disparity raised costs and reduced the practicality of using stablecoins for settlement, custody, and short-term liquidity functions.
Regulatory momentum underpins the change: the SEC has been running initiatives to modernize crypto rules and flagged plans for targeted exemptions and updated custody guidance, while Congress and other agencies are implementing a federal stablecoin framework. Industry leaders say the staff note is a practical step toward treating certain stablecoins like short-term cash instruments.
- Lowered capital drag: a 2% haircut makes holding stablecoins far cheaper for dealers.
- Market effects: could improve intraday liquidity and shorten settlement cycles.
- Operational: paves the way for deeper use of tokenized securities and blockchain rails.
Responses from market participants were broadly positive, with fintech strategists and ex-executives calling the clarification a removal of a key obstacle to integrating crypto-based cash equivalents into mainstream markets. Nonetheless, the staff guidance is narrow: it addresses proprietary positions and does not by itself create broad safe harbors for custody or customer asset treatment.
Practical consequences will depend on how broker-dealers, custodians, and clearing firms implement the change, and whether state and federal actors align on rules like reserve requirements, auditability, and redemption mechanics for payment stablecoins. Risk managers will still need to model run scenarios, counterparty exposures, and operational failure modes tied to token infrastructure.
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