Circle SEC comments push for GENIUS Act alignment on stablecoin cash treatment

Circle submitted a comment letter to the U.S. Securities and Exchange Commission on October 20, 2026, addressing the proposed Regulation Crypto Assets (File No. S7-2026-27). The filing outlines specific changes to integrate the GENIUS Act framework for payment stablecoins into the new offering rules.

Circle SEC comments detail alignment and cash treatment requests

The letter recommends that the SEC clarify treatment of GENIUS-compliant permitted payment stablecoins as settlement assets in on-chain offerings. Circle asks that such stablecoins avoid triggering additional issuer obligations when used for consideration in capital formation transactions.

Circle further requests that qualifying stablecoins receive explicit “cash” status under proposed Rule 302(b). This would allow dollar-based valuation, standard accounting entries, and inclusion in customer reserve calculations required by Rule 15c3-3.

The company also seeks reduction of the existing 2 percent net capital haircut to zero for GENIUS-compliant stablecoins. The proposal ties the lower requirement to objective safeguards including 1:1 high-quality liquid asset reserves and mandatory par redemption.

GENIUS Act background and prior SEC staff positions

The GENIUS Act, enacted in 2025, created the first federal regime for payment stablecoins. It mandates 1:1 backing with cash or high-quality liquid assets, par redemption rights, ongoing supervision, and regular attestations for permitted issuers.

Circle has filed related comments with Treasury, the OCC, and the FDIC on implementation details since the statute’s passage. Its October 20 submission extends that engagement to the SEC’s proposed crypto-asset framework.

An earlier SEC staff FAQ issued in February 2026 permitted a 2 percent haircut for certain pre-GENIUS stablecoins that met state-level reserve and attestation standards. Circle’s letter argues that GENIUS standards provide stronger prudential features that justify a zero haircut.

Additional recommendations and regulatory next steps

Circle supports technology-neutral rules that accommodate permissionless networks with auditable validator sets. The letter states that post-launch technical services, such as maintaining a known validator set, should not qualify as essential managerial efforts under the Howey test.

The company also suggests a safe harbor for technical roadmaps that meet defined disclosure criteria. The SEC is currently reviewing all public comments on Regulation Crypto Assets; no finalization timeline has been announced.

Coordinated interagency guidance on stablecoin accounting and prudential treatment may follow once the rule is completed. Market participants can review the full comment letter on the SEC website and the linked PDF posted by Circle.