The U.S. Securities and Exchange Commission (SEC) has taken a significant step in its approach to stablecoins, a move that analysts are interpreting as a major development for the cryptocurrency sector. According to Phyrex Ni, a cryptocurrency analyst, the SEC’s recent update signals a shift in how stablecoins are treated in financial regulations, potentially opening the door for broader institutional adoption.

Rate Adjustment Changes the Game

The SEC’s Trading and Markets Division recently issued a frequently asked questions (FAQ) document, stating that “compliant stablecoins” can be valued with a 2% in brokerage firms’ net capital calculations. This change marks a dramatic shift from the previous 100% rate, which effectively rendered stablecoins unusable as capital assets.

Previously, stablecoins were treated as extremely risky, meaning that a brokerage firm holding $1 million in stablecoins could not use any of that value toward its capital requirements. Instead, it would have to hold an additional $1 million in cash, making stablecoins a costly and inefficient asset for institutions.

Under the new 2% rate, 98% of the value of stablecoins can be used in capital calculations. This change is comparable to the treatment of money market funds, allowing institutions to meet capital requirements with significantly less cash on hand. For example, a firm holding $1 million in stablecoins would now only need an additional $20,000 in cash, a 50-fold increase in capital efficiency.

Institutional Winners and the Path Forward

The shift is expected to benefit regulated, licensed institutions such as Goldman Sachs, JPMorgan Chase, and Robinhood. These firms could now use stablecoins more freely on their balance sheets, reducing the burden of holding large amounts of cash.

Phyrex Ni notes that this change could have a significant impact on the market, particularly for compliant payment stablecoins like USD Coin (USDC), which are already prominent in the crypto space. With the new rate, these stablecoins are becoming more attractive for institutional use, potentially driving increased adoption.

The analyst also highlighted the implications for real-world asset (RWA) tokenization and on-chain transactions. If exchanges transition to 24/7 tokenized stock trading, institutions could use stablecoins for instant deliveries and collateral transfers without the added burden of holding large amounts of stablecoins.

However, the current update is not an official rule change from the SEC. The new approach is more of a “no objection” stance at the staff level, rather than a formal regulatory directive. For legal certainty, this needs to be formalized into an official rule.

Focus on Compliance and Future Regulation

Phyrex Ni emphasized that the change applies only to “compliant payment type stablecoins” as defined by law. This means that not all stablecoins will benefit from the new rate, only those that meet specific regulatory criteria.

The analyst believes that the significance of this development lies in its long-term impact rather than short-term price movements. The ability of stablecoins to scale on an institutional level depends less on transaction volume and more on how they are classified on the balance sheets of regulated institutions.

If this approach becomes a permanent and formal rule, it could pave the way for Wall Street capital to integrate into on-chain financial infrastructures with lower compliance costs. This could lead to a more smooth interaction between traditional finance and the cryptocurrency sector.

The SEC’s recent move has already generated excitement in the market, with many analysts seeing it as a positive signal for the future of digital assets. However, the path to full institutional adoption will depend on the SEC’s willingness to formalize this policy and ensure legal clarity for all stakeholders.