Circle Urges SEC to Ease Stablecoin Rules in Crypto Fundraising Proposal

Circle (NYSE: $CRCL) has urged the US Securities and Exchange Commission (SEC) to clarify how regulated payment stablecoins should be treated under its proposed crypto fundraising rules, including a request to eliminate a 2% capital haircut for qualifying stablecoins held by broker-dealers.

In a comment letter submitted on October 20 and announced today, the issuer of USDC (CRYPTO: $USDC) backed the SEC’s proposed Regulation Crypto Assets but called for changes covering stablecoins, blockchain networks and the obligations of crypto issuers after their networks become operational.

The SEC introduced the proposal in August to establish exemptions from securities registration requirements for certain crypto asset offerings.

It would allow eligible issuers to raise up to $5 million over four years under one exemption and up to $75 million in a 12-month period under another, while retaining disclosure requirements and federal anti-fraud protections.

Circle said the framework should remain technology-neutral and account for how blockchain networks can improve settlement speed, transaction programmability and recordkeeping.

It also asked the SEC to clarify how different permissionless network structures, including networks such as its Arc (CRYPTO: $ARC) blockchain, should be treated.

A key concern is the role of payment stablecoins in onchain capital formation. Circle wants the SEC to align the proposed rules with the GENIUS Act, the federal law establishing a regulatory framework for payment stablecoins.

“The letter further asks the Commission to clarify that qualifying payment stablecoins constitute “cash” for purposes of proposed Rule 302(b), receive appropriate dollar-based valuation treatment, and qualify for appropriate accounting and customer-reserve treatment,” Circle wrote.

Circle also wants the SEC to remove the existing 2% broker-dealer capital haircut for stablecoins compliant with the GENIUS Act.

Circle shares are currently trading at $79.86 apiece, down 2.11% today.