Circle has asked the U.S. Securities and Exchange Commission to give qualifying payment stablecoins a clearer role in its proposed framework for crypto fundraising. In an October 20 comment letter publicized on October 28, the USDC issuer supported the SEC's goal of creating tailored pathways for certain crypto-asset offerings while urging coordination with the GENIUS Act. The company wants compliant payment stablecoins recognized as settlement assets rather than treated as a second investment-contract asset merely because an issuer accepts them in an offering. The recommendations remain advocacy in an open rulemaking file, not SEC policy.

The SEC proposal creates two offering paths

Regulation Crypto Assets, proposed in August, would create two exemptions from Securities Act registration for offerings involving certain crypto investment contracts. One would permit up to $5 million during a four-year period. The other would allow up to $75 million in a 12-month period, with financial statements and ongoing reporting requirements. The proposal also includes a conditional safe harbor intended to clarify when a crypto asset is no longer tied to an investment contract after essential managerial efforts are completed or permanently stopped.

Related reporting: OCC Urges Community Banks to Explore Stablecoin Issuance

Circle wants stablecoin payments separated from the offered asset

Circle's central request is that Regulation Crypto Assets operate consistently with the GENIUS Act's payment-stablecoin regime. The company says the SEC should distinguish the crypto asset connected to an investment contract from a qualifying payment stablecoin used to buy or settle it. It also asks the agency to define which GENIUS-compliant tokens may serve as consideration, how eligibility should be tested and what happens if a token later loses that status. Clear separation would matter to issuers, intermediaries and investors using onchain settlement. It could also shape custody, disclosure and transaction-reconciliation processes.

Cash treatment would change offering mechanics

The letter asks the SEC to treat a qualifying dollar payment stablecoin as cash under proposed Rule 302(b). For a token redeemable one-for-one in dollars, Circle argues that consideration should be measured at the corresponding dollar amount rather than requiring a separate non-cash valuation solely because settlement occurs on a blockchain. The company also seeks coordinated accounting and customer-reserve guidance. Those requests aim to reduce friction between conventional securities rules and payment instruments designed for round-the-clock digital settlement.

A separate request targets broker-dealer capital

Circle also recommends reducing the current 2% broker-dealer capital haircut on qualifying payment-stablecoin positions to zero, subject to objective safeguards. Its suggested criteria cover redemption rights, reserve quality and liquidity, legal enforceability, safeguarding and operational resilience. A lower haircut could make regulated stablecoins more efficient for broker-dealer treasury and settlement functions, but it would also require the SEC to determine whether GENIUS compliance provides enough protection to justify treatment closer to cash.

Technical work after launch is another unresolved line

The comment asks the SEC to clarify that maintaining a known validator set or publishing a technical roadmap after a network becomes functional does not automatically restart the analysis of essential managerial efforts. Circle favors a technology-neutral rule that can accommodate permissionless networks with different validator structures. The next step is the SEC's consideration of the full comment record and any revised or final rule. Until the Commission acts, the 2% haircut, cash classification and post-launch service boundaries described by Circle have not changed.

Sources

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