Circle urges SEC to align crypto rules with GENIUS Act

The GENIUS Act is now part of the backdrop for how U.S. regulators frame payment stablecoins, and Circle is using that law as a reference point in its engagement with the SEC. The company’s filing sits inside the SEC’s work on Regulation Crypto Assets, which is the proposed framework it wants updated. This is a rules-setting moment for a token category that is already used as a payments instrument rather than only as a trading asset.

If the SEC accepts Circle’s ask, qualifying payment stablecoins would receive treatment closer to cash inside its fundraising and broker-dealer rules. That would change how firms account for them in capital calculations and could lower the balance-sheet burden tied to holding them in regulated intermediaries. For issuers and trading firms, the practical question is how these assets are recognized inside existing securities plumbing.

The dispute reaches beyond one company because it tests whether stablecoins fit into securities regulation as a cash-like instrument or remain inside a more restrictive compliance box. A cash-style reading would make regulated use easier for some intermediaries, while a stricter reading keeps more distance between tokenized payment rails and the securities market structure. The trade-off is between regulatory clarity for a payments product and a framework that treats the same token as something more sensitive than money.

Still open is whether the SEC will fold the GENIUS Act into its proposed rule text and whether it will accept Circle’s proposed haircut change from 2% to zero. The final treatment of qualifying payment stablecoins has not been set out in the material, and the SEC’s next draft or response would show whether the agency is willing to match its proposal to the new statute. Circle’s letter leaves the outcome unresolved for broker-dealers and other market participants that would have to follow the rule if it changes.