Circle urges SEC to remove 2% capital haircut o... - Pluang

Circle has asked the U.S. Securities and Exchange Commission to remove a 2% capital haircut applied to certain stablecoin holdings, according to Pluang. The request concerns how stablecoin reserves are treated in capital calculations, an issue that matters because a haircut effectively forces firms to hold extra capital against assets that are designed to trade at par.

The market relevance lies in how such rules shape the economics of stablecoin issuance and custody. A 2% haircut raises the cost of holding or using stablecoins on balance sheets, which can influence liquidity, treasury management, and how institutions structure their exposure. Circle's argument, as reported, is that the treatment may not reflect the risk profile of these assets.

What to watch: whether the SEC responds formally, and whether other regulators revisit similar capital treatments. Any change could affect how stablecoins are integrated into regulated finance, while a rejection would leave existing calculations intact. For now, this is a policy request rather than a rule change, so the practical impact depends on the regulator's next steps.