The U.S. Securities and Exchange Commission (SEC) has taken a significant step toward integrating compliant stablecoins into the regulated financial system, while ProShares launched a massive new ETF designed specifically for the stablecoin reserve market.
The SEC's Trading and Markets Division issued an FAQ stating that "compliant stablecoins" can now be valued with a 2% discount (haircut) in brokerage firms' net capital calculations. This marks a dramatic shift from the previous 100% discount rate, which effectively treated stablecoin holdings as worthless for capital purposes. SEC Commissioner Hester Peirce noted that stablecoins are moving away from being "virtually unusable assets" and are approaching the status of low-risk, cash-like instruments.
Analyst Phyrex Ni highlighted the impact: an institution holding $1 million in stablecoins previously had to hold an equivalent amount of additional cash. Under the new 2% rate, only $20,000 in additional capital is required, increasing capital efficiency by nearly 50 times. This change is seen as particularly beneficial for regulated, licensed institutions like Goldman Sachs, JPMorgan Chase, and Robinhood, and for compliant payment-type stablecoins like USD Coin (USDC).
Concurrently, ProShares debuted the ProShares GENIUS Money Market ETF (IQMM), an ETF structured to hold short-term U.S. Treasuries and meet the reserve requirements of the GENIUS Act, the federal law regulating U.S. stablecoin issuers. The fund saw a staggering $17 billion in first-day trading volume, far exceeding the $1 billion debut of BlackRock's spot bitcoin ETF.
The massive volume sparked speculation that a major stablecoin issuer, potentially Circle (issuer of USDC), was involved. However, analysis suggests a significant portion likely came from internal ProShares fund movements, including a $6 billion allocation from its QTTT leveraged ETF. Despite this, the ETF's design positions it as a potential go-to tool for U.S.-based stablecoin issuers like Circle, Paxos, and BitGo, and for banks issuing tokenized deposits under the new law.
Markus Thielen of 10x Research called IQMM "currently the only purpose-built tool" that meets GENIUS Act rules while providing high-speed liquidity. As the $300+ billion stablecoin market grows under increasing regulation, tens of billions in assets could eventually flow into such funds.
It's crucial to note that the SEC's new capital treatment is not yet an official rule change but a "no objection" approach at the staff level, applying only to "compliant payment type stablecoins" as defined by law. If formalized, it could significantly lower compliance costs and pave the way for deeper Wall Street integration into on-chain finance.
