Ripple’s RLUSD and other payment stablecoins in the U.S. have received a major boost from the SEC’s latest guidance, which reduces the haircut that broker-dealers must apply to positions in stablecoins. SEC Chair Paul Atkins also commented on this move, describing it as a great step as traditional finance (TradFi) firms look to access on-chain markets.
SEC Provides New Guidance, Boosting RLUSD And Other Stablecoins
In an SEC statement, Commissioner Hester Peirce noted that the staff of the Division of Trading and Markets confirmed that they would not object if a broker-dealer were to apply a 2% haircut on proprietary positions in a payment stablecoin when calculating its net capital.
Before now, some of these firms had been applying a 100% haircut to their payment stablecoin holdings, meaning they could not count as regulatory capital. However, the SEC Commissioner opined that a 100% haircut would be “unnecessarily punitive” given that the underlying reserve assets that back these payment stablecoins.
She also noted that the 2% haircut aligns with the haircut that the Commission imposes on registered investment companies that are money market funds, which hold similar instruments as payment stablecoin issuers.
It is worth noting that payment stablecoins include Ripple’s RLUSD and others issued by a state-regulated money transmitter, state-regulated trust company, or a national trust bank prior to the effective date of the GENUS Act, which is next year.
Meanwhile, Peirce remarked that stablecoins are essential to transacting on blockchain rails. She added that using these stablecoins will make it feasible for broker-dealers to engage in a broader range of business activities relating to tokenized securities and other crypto assets.
This move comes as the SEC considers a regulatory path for these tokenized securities. SEC Chair Paul Atkins had revealed earlier this week that they are looking into a narrow exemption for trading of tokenized securities on new platforms. Commenting on this latest guidance for broker-dealers, Atkins described the move as another “terrific step” in the right direction to remove barriers and unlock access to on-chain markets.
“Most Important Win Of The Year So Far”
Exodus CEO JP Richardson described the SEC’s latest guidance as the most important win of the year. He stated that this move will open the floodgates for embedding stablecoins in institutional finance. Richardson further remarked that broker-dealers will now be able to settle trades in stablecoins without torching their balance sheets.
“Tokenized treasuries, equities, bonds, on-chain settlement have all become economically viable overnight. Today’s guidance starts converting the GENIUS Act’s legal framework into something a compliance officer can actually act on,” he added.
Broker-dealers such as Interactive Brokers are already notably warming up to stablecoins. Last month, Interactive Brokers enabled stablecoin funding for brokerage accounts, enabling users to trade traditional securities with these stablecoins.
Meanwhile, market expert Luigi DeMeo also echoed a similar sentiment to Richardson. He noted that the move from the SEC will lower the barrier for deeper integration of stablecoins into traditional finance rails. The expert said that this equals better liquidity, more efficient settlement, and broader institutional on-ramps.
Source: https://coingape.com/ripples-rlusd-gets-institutional-boost-as-sec-eases-stablecoin-rules-for-broker-dealers/
