SEC’s Hester Peirce Supports Rule Update Allowing Stablecoin Holdings for Broker-Dealers
The SEC’s Division of Trading & Markets now permits broker-dealers a 2% net capital haircut on eligible payment stablecoins, aligning their treatment with money market funds under the GENIUS Act framework.
On February 19, 2025, the SEC's Division of Trading & Markets issued guidance enabling broker-dealers to apply a 2% net capital haircut, rather than a 100% deduction, on eligible payment stablecoins. Commissioner Hester Peirce endorsed the change, noting it aligns stablecoin treatment with money market fund standards and bridges the GENIUS Act framework with SEC rules. The policy applies to USD-denominated stablecoins issued by regulated money transmitters or trust banks that meet reserve, disclosure, and attestation criteria. This update facilitates integration of stablecoins into broker-dealer operations, including custody, settlement, and tokenized securities.
- Stablecoin: A cryptocurrency pegged to a stable asset, such as the U.S. dollar, designed to reduce volatility.
- GENIUS Act: Legislation intended to establish regulatory standards for digital assets, including stablecoins, within the U.S. financial system.
- Money Market Fund: An investment fund that invests in short-term, high-quality debt instruments and aims to provide liquidity and stability similar to cash.