The U.S. Securities and Exchange Commission (SEC) has updated how broker-dealers must treat stablecoins in their capital calculations.

Stablecoins like USDT and USDC are digital dollars. They are crypto tokens designed to stay pegged 1:1 to the U.S. dollar and are usually backed by cash or short-term Treasury assets.

They are heavily used in trading, payments, and decentralized finance(DeFi).

Under previous capital rules, broker-dealers had to treat stablecoins as extremely risky assets inside regulated finance.

If a firm held $1 million in stablecoins, it often had to set aside nearly another $1 million of its own capital as a safety buffer.

That made it expensive and inefficient for Wall Street firms to hold or use them, which pushed most institutions to stay away.

Now the SEC’s Trading and Markets Division has clarified its position through updated regulatory guidance.

For approved stablecoins that are properly backed by safe assets like the U.S. Treasury bills, the SEC said firms only need to set aside about 2% extra capital.

That means if a firm holds $1 million in stablecoins, it only needs to set aside about $20,000 in additional capital, not another $1 million.

Instead of treating stablecoins as toxic assets, the SEC is recognizing them as lower-risk payment instruments when properly backed.

Before this change, crypto companies were constantly dealing with lawsuits and unclear rules. No one was sure how regulators would classify many crypto products.

Stablecoins were popular inside the crypto world, but most traditional Wall Street firms avoided them because of the uncertainty.

So this new rule changes the game.

It means:

➳ Wall Street firms no longer need to lock up huge amounts of extra money just to hold stablecoins.

➳ Banks, brokers, and exchanges can now use stablecoins more easily for liquidity, trading, and other financial purposes.

➳ Stablecoins could become more accepted in mainstream finance.

➳ More institutional participation could strengthen the overall crypto market.

When rules become clearer instead of restrictive, capital tends to flow in.

This does not mean crypto is suddenly unregulated. It means the rules are becoming clearer.