SEC loosens stablecoin risk discount, institutional capital allocation ushers in a new turning point

Recently, the U.S. Securities and Exchange Commission (SEC) Trading and Markets Division clarified in its FAQs that compliant “payment stablecoins” can be treated with a 2% risk discount rate in broker-dealer net capital calculations. This move immediately drew market attention, and SEC Commissioner Hester Peirce subsequently confirmed it, marking a fundamental shift in the regulatory treatment of stablecoins—from nearly unusable high-risk assets to assets approaching low-risk cash equivalents.

This policy adjustment appears to be a rule revision, but it actually reflects a profound change in regulators’ perception of stablecoin risk. The real issue is that many people have not yet grasped the underlying economic logic.

From 100% to 2%, the regulatory game behind the discount rate

To understand the significance of this policy, first, we need to clarify what a discount rate is.

A discount rate is essentially an economic valuation mechanism used by regulators to price asset risk. To prevent financial institutions from facing capital shortfalls due to risk, regulators require them to maintain sufficient net capital. When calculating this net capital, held assets cannot be valued at 100% of market value but must be discounted by a certain percentage. This percentage is the discount rate.

Under previous rules, stablecoins had a 100% discount rate. What did that imply? It meant regulators considered stablecoins extremely risky, effectively valuing their capital worth as zero. For example, if a broker-dealer held $1 million in stablecoins, they would need to spend $1 million to acquire them and also set aside an additional $1 million in risk capital as a “regulatory margin.” In other words, holding $1 million worth of stablecoins would tie up $2 million in capital. This made stablecoins an extremely uneconomical asset choice for licensed institutions.

The new rule reduces the discount rate to 2%, which is the complete opposite logic. It indicates that regulators now consider stablecoins sufficiently safe as assets, assigning them a 98% capital valuation. Holding $1 million in stablecoins would only require an additional $20,000 in regulatory margin. From $1 million to $20,000, capital efficiency instantly increases by 50 times.

Notably, this treatment is identical to that of money market funds (MMFs). MMFs are investment funds that hold short-term, low-risk debt securities (like Treasury bills, commercial paper, bank certificates of deposit). Due to their high-quality assets and extremely low risk, regulators give them a 2% discount rate. Now, stablecoins receiving the same discount rate effectively gain the same regulatory recognition as these low-risk investments.

Who are the biggest beneficiaries of this easing?

This policy change impacts different participants in vastly different ways.

For licensed broker-dealers, investment banks, and other tightly regulated financial institutions, the previous 100% discount rate made holding stablecoins highly inefficient—costly and unattractive. But under the new rules, the cost structure shifts dramatically. Now, if there is a business need, institutions can flexibly hold stablecoins without worrying about capital consumption. What was once a “forced avoidance” option now becomes a “free choice” tool.

At the token level, this policy favors compliant payment stablecoins. According to the recent stablecoin legislation, eligible stablecoins include USDC, USD1, and similar products. The market cap ceiling for these stablecoins will thus be significantly raised.

The most direct application scenarios are in RWA (real-world asset tokenization) and on-chain settlement. For example, when the New York Stock Exchange launches 24/7 tokenized US stock trading, institutional investors can use stablecoins for instant settlement and collateral transfer. Moreover, because they no longer need to worry that holding large amounts of stablecoins will cause double capital charges, their allocation efficiency will be greatly improved. This is crucial for building a 24-hour on-chain financial market infrastructure.

How far are we from formal regulatory rules?

It’s important to clarify that this is not yet an official SEC rule change but a “non-opposition” stance at the working level. In other words, it’s a guiding position rather than a binding formal regulation.

Legal certainty will depend on whether this approach is eventually codified into official regulatory rules. Nonetheless, the support at the working level already sends a clear signal to the market.

Additionally, this policy is not a blanket approval. Not all stablecoins will enjoy a 2% discount rate—only those that qualify as payment stablecoins. This is an effective way to distinguish stablecoin quality and prevent the risk of bad tokens crowding out good ones.

The real turning point isn’t in token prices, but in institutionalization

Many people’s first reaction to this policy is “token prices will rise.” But that’s a superficial understanding.

The core of this policy change isn’t short-term price movement but the institutional status of stablecoins on balance sheets. Whether stablecoins can achieve long-term expansion depends not on on-chain activity or trading volume but on whether they can become standard assets for compliant institutions.

Once this framework is officially incorporated into regulatory rules, stablecoins will truly enter a phase of institutionalized prosperity. Wall Street’s massive capital can deploy on the blockchain with lower compliance costs, marking a genuine turning point from niche tools to mainstream financial infrastructure.

For the payment stablecoin ecosystem, this is a transition from “tolerance” to “acceptance,” and from the “gray area” into the “regulated system.”