SEC Applies 2% Discount Rate to Compliant Stablecoins in Net Capital Calculations

The US Securities and Exchange Commission (SEC) has made a recent move that has been seen as bullish for cryptocurrencies. The SEC's Trading and Markets Division published an FAQ stating that compliant stablecoins can be valued at a 2% discount in brokerage firms' net capital calculations.

This change is significant because it affects the way institutions value and hold stablecoins. Previously, stablecoins were considered extremely risky assets and were treated as zero in capital calculations. This meant that institutions had to hold additional cash to meet their obligations, making holding stablecoins costly and inefficient.

With a 2% discount rate, compliant stablecoins can now be included at almost 98% of their market value in the capital account. This increases capital efficiency by almost 50 times, according to analysts. Regulated institutions such as Goldman Sachs, JPMorgan Chase, or Robinhood may benefit from this change.

The SEC's decision is not an official rule change yet, but a 'no objection' approach at the staff level. For legal certainty, it needs to become official regulation. This practice will apply only to 'compliant payment type stablecoins' as defined by law.