Circle asks SEC for stablecoin cash treatment and a zero haircut - Crypto News

Circle has asked the U.S. Securities and Exchange Commission to treat stablecoin holdings as cash and to apply a zero haircut to them, according to Crypto News. The request centers on how regulated firms account for stablecoin balances and how much capital they must set aside against those holdings.

The distinction matters because "cash treatment" and a "zero haircut" are regulatory classifications, not market prices. If accepted, stablecoins could be recognized more like cash equivalents in certain contexts, potentially reducing the capital burden tied to holding them. That could affect how brokerages, funds, and other regulated entities manage liquidity and settle transactions.

What to watch is the SEC's response and whether the request leads to formal guidance or rule changes, and how other regulators weigh in. Until then, the proposal is a request, not an approved standard, and firms' current treatment of stablecoins remains governed by existing rules. Market participants should track any official statements rather than treat the filing as a settled outcome.