Circle Submits Comment Letter on SEC's Proposed Cryptocurrency Asset Regulation Rule, Recommends Treating Compliant Payment Stablecoins as "Cash"

TechFlow: On October 28, according to Circle's official blog, Circle submitted a comment letter to the U.S. Securities and Exchange Commission (SEC) on October 20 in response to its proposed Regulation on Crypto Assets. The proposal aims to establish a tailored regulatory framework for certain crypto asset issuance and investment contracts. Circle expressed support for the proposal, emphasizing that regulation should remain technology-neutral, and suggested that the SEC further clarify how to handle different permissionless network structures.

Circle recommended aligning the regulation with the GENIUS Act. The comment letter requested that the SEC explicitly classify compliant payment stablecoins as "cash" under proposed Rule 302(b), granting them corresponding USD-denominated status, accounting treatment, and customer reserve treatment. Circle also recommended reducing the 2% broker haircut applicable to compliant payment stablecoins to zero, subject to objective safeguard measures. Additionally, Circle requested that the SEC clarify that post-launch technical services (including maintaining a known validator set) do not constitute "requisite managerial effort", and suggested establishing a safe harbor for technical roadmaps to prevent already operational networks from being reclassified due to ongoing maintenance and improvements.