Circle Submits Comment Letter on SEC's Proposed Regulation Crypto Assets, Recommends Treating Compliant Payment Stablecoins as "Cash"

TechFlow, Oct. 28 — According to Circle's official blog, Circle submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) on Oct. 20 in response to its proposed Regulation Crypto Assets. The proposal aims to establish a tailored regulatory framework for certain crypto asset issuances and investment contracts. Circle expressed support for the proposal and emphasized that regulation should remain technology-neutral, while recommending that the SEC further clarify the treatment of different permissionless network structures.

Circle recommended that the regulation be aligned with the GENIUS Act. The comment letter requested that the SEC clarify that compliant payment stablecoins fall within the meaning of "cash" under proposed Rule 302(b) and receive corresponding USD-denominated, accounting, and customer reserve treatment. Circle also recommended reducing the 2% broker-dealer haircut applicable to compliant payment stablecoins to zero, subject to objective safeguards. In addition, Circle requested that the SEC clarify that technical services after a network goes live and operates (including maintaining known validator sets) do not constitute "essential managerial efforts," and recommended establishing a safe harbor for technical roadmaps so that live networks are not reclassified due to ongoing maintenance and improvements.

Source: TechFlow