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 reserves as cash equivalents and to apply a zero haircut to them. The request, reported by Crypto News, centres on how stablecoin issuers' holdings are measured for regulatory and capital purposes.

The term "haircut" refers to the discount applied to an asset's value when it is counted toward capital or collateral requirements. A zero haircut would mean stablecoin reserves are valued at face value rather than discounted for perceived risk. This matters because stablecoin issuers typically hold reserves in short-term instruments such as Treasury bills, and how those holdings are classified can affect balance-sheet treatment and the cost of maintaining reserves.

For markets, the request signals a push for clearer accounting and capital rules around stablecoins as they become more integrated into mainstream finance. What to watch: whether the SEC responds formally, how any guidance treats reserve composition across different issuers, and whether the outcome influences similar requests from other firms. Any change could shape how stablecoin reserves are viewed by regulated institutions, but the request itself does not alter current rules.