Analyst Phyrex Ni has assessed the US Securities and Exchange Commission’s (SEC) recent move regarding stablecoins.
The SEC’s Trading and Markets Division’s recent FAQ stated that “compliant stablecoins” can be valued with a 2% discount (haircut) in brokerage firms’ net capital calculations, drawing attention in the market.
SEC member Hester Peirce also stated that stablecoins are moving away from being virtually unusable assets in regulatory capital calculations and are beginning to approach the status of low-risk cash-like instruments.
According to Phyrex Ni, the key concept here is the “discount rate.” Regulators require brokerage firms to maintain a certain net capital to mitigate the risk of bankruptcy. However, when calculating this capital, the assets held are not considered 100% of their market value; instead, a certain percentage is applied based on the risk level. The 100% discount rate previously applied to stablecoins meant that the regulator considered these assets extremely risky and treated their value as zero in capital calculations. For example, if a brokerage firm held $1 million worth of stablecoins, it could not use it in its capital account; it also had to hold an additional amount of cash. This made holding stablecoins costly and inefficient for institutions.
The new approach, with a 2% discount rate, means that 98% of the value of stablecoins can be included in the capital account. This rate is close to the level applied to money market funds. Thus, an institution holding $1 million worth of stablecoins can meet its obligation by allocating only $20,000 in additional capital. Phyrex Ni states that this increases capital efficiency by almost 50 times.
It is suggested that the biggest winners of this change could be regulated, licensed institutions such as Goldman Sachs, JPMorgan Chase, or Robinhood. Previously, holding stablecoins was considered a “balance sheet-damaging” choice due to a 100% discount, but now, at a 2% discount, these assets become virtually weightless and usable as needed. This means a higher upper limit, especially for issuers of compliant payment type stablecoins. It is stated that regulated, compliant projects like USD Coin (USDC), which are prominent in the market, could benefit from this development.
This step is considered critical, particularly in terms of the tokenization of real-world assets (RWA) and on-chain instant exchange transactions. For example, if exchanges switch to 24/7 tokenized stock trading, institutions will be able to make instant deliveries and collateral transfers with stablecoins; they will not face the obstacle of holding large amounts of stablecoins creating a double capital burden on the balance sheet.
However, Phyrex Ni points out that the current announcement is not yet an official SEC rule change. The current situation is more of a “no objection” approach at the staff level. For legal certainty to be ensured, this needs to become official regulation. Furthermore, this practice will apply not to all stablecoins, but only to “compliant payment type stablecoins” as defined by law.
In conclusion, according to the analyst, the significance of this development lies not in short-term price movements, but in making balance sheets more stablecoin-friendly. The ability of stablecoins to expand on an institutional scale depends less on on-chain transaction volume and more on how they are classified on the balance sheets of regulated institutions. If this approach becomes a permanent and formal rule, it could pave the way for Wall Street capital to integrate into on-chain financial infrastructures with lower compliance costs.
*This is not investment advice.
