Circle Submits Comments to SEC on Proposed Crypto Asset Regulation
Written with artificial intelligence.
Circle has submitted a comment letter to the SEC regarding its proposed Regulation Crypto Assets. The company recommends that payment stablecoins compliant with the GENIUS Act be classified as 'cash' and suggests reducing the haircut on broker-held stablecoins to zero.
Circle's Recommendations to the SEC
On October 28, Circle announced via its official blog that it has provided feedback to the U.S. Securities and Exchange Commission (SEC) regarding the proposed Regulation Crypto Assets. Circle's letter emphasizes the need for alignment with the GENIUS Act, urging the SEC to clarify that payment stablecoins meeting the criteria of the GENIUS Act should be classified as 'cash' under proposed rule 302(b), and valued in U.S. dollars. This classification would also dictate the appropriate accounting and customer reserve treatments.
Proposed Changes to Broker Holdings
In its submission, Circle recommends that, provided there are objective safeguards in place, the 2% haircut currently applied to broker-held payment stablecoins be eliminated entirely. This change would potentially enhance the liquidity and usability of these stablecoins within the financial system.
Definition of Technical Services
Additionally, Circle asks the SEC to clarify that technical services required after a network goes live, such as maintaining a known set of validators, should not be considered 'critical management efforts.' The company also advocates for the establishment of a safe harbor for their technical roadmap, which could encourage further innovation in the crypto space.