Circle supports a clear, technology-neutral framework for onchain capital formation
- Why Circle supports a clear, technology-neutral framework for onchain capital formation.
- How Circle recommends coordinating the proposal with the GENIUS Act.
- Why qualifying payment stablecoins should receive appropriate cash and prudential treatment.
On October 20, Circle submitted comments to the Securities and Exchange Commission on its proposed Regulation Crypto Assets, which would establish a tailored framework for certain crypto-asset offerings and investment contracts.
Circle supports the proposal’s goal of fostering innovation under clear rules while preserving the strengths of U.S. capital markets, including transparency, investor protection, market integrity, liquidity, and efficiency. Blockchain networks can complement those strengths through faster settlement, programmable transactions, transparent records, and improved auditability.
Circle’s comments emphasize the importance of technology neutrality.
Permissionless networks like Arc offer the potential for scale and network security. We encourage the SEC to clarify the treatment around different permissionless network structures.
Circle also recommends that Regulation Crypto Assets operates consistently with the GENIUS Act. Because payment stablecoins are becoming important consideration and settlement assets in onchain capital formation, Circle asks the SEC to clarify the treatment for how GENIUS-compliant payment stablecoins may be used for those purposes.
The letter further asks the Commission to clarify that qualifying payment stablecoins constitute “cash” for purposes of proposed Rule 302(b), receive appropriate dollar-based valuation treatment, and qualify for appropriate accounting and customer-reserve treatment. Circle also recommends reducing the current 2% broker-dealer haircut to zero for GENIUS-compliant payment stablecoins, subject to objective safeguards.
Finally, Circle asks the SEC to clarify that technical services performed after a network becomes functional—including maintaining a known validator set—do not constitute essential managerial efforts. A safe harbor for technical roadmaps would allow issuers to continue maintaining and improving functioning networks without inadvertently restarting that analysis.
