Circle Submits Comments on the SEC’s Proposed Crypto Asset Regulations

According to Huoxing Finance, on October 28, Circle submitted comments to the U.S. Securities and Exchange Commission regarding its proposed regulatory framework for crypto assets. Circle supports the proposal’s objectives of fostering innovation under clear rules while preserving the strengths of U.S. capital markets, including transparency, investor protection, market integrity, liquidity, and efficiency. Circle also recommends that the crypto asset regulatory framework align with the GENIUS Act. Given that payment stablecoins are increasingly becoming essential consideration and settlement assets for on-chain capital formation, Circle requests the U.S. Securities and Exchange Commission (SEC) to clarify how payment stablecoins compliant with the GENIUS Act may be used for these purposes. The letter further requests the Commission to clarify that qualifying payment stablecoins under proposed Rule 302(b) constitute “cash,” should receive appropriate U.S. dollar valuation treatment, and meet corresponding accounting and customer reserve requirements. Circle also suggests reducing the current 2% broker discount on qualifying payment stablecoins under the GENIUS Act to zero, provided objective safeguards are in place. Finally, Circle requests the SEC to clarify that technical services provided after network deployment—including maintaining a known set of validation nodes—do not constitute necessary management activities. Establishing a safe harbor rule for technology roadmaps would allow issuers to continue maintaining and improving operational networks without inadvertently restarting relevant analyses.