Circle urges SEC to align crypto rules with GENIUS Act

Circle said it submitted comments to the U.S. Securities and Exchange Commission on October 20 on the agency’s proposed Regulation Crypto Assets, urging the commission to align the framework with the GENIUS Act and to clarify how payment stablecoins should be treated in onchain capital formation. The company said the proposal could support innovation while preserving market transparency, investor protection, liquidity and efficiency, but asked for clearer rules on permissionless networks, stablecoin use and post-launch technical services.

Evidence and context

In its comment letter, Circle backed the SEC’s stated goal of creating a tailored framework for certain crypto-asset offerings and investment contracts, while arguing that blockchain networks can complement existing market strengths through faster settlement, programmable transactions, transparent records and improved auditability. The company also emphasized technology neutrality and said permissionless networks such as Arc can offer scale and network security, while asking the SEC to clarify the treatment of different permissionless network structures.

Circle said the proposal should operate consistently with the GENIUS Act. It asked the SEC to clarify how GENIUS-compliant payment stablecoins may be used as payment and settlement assets in onchain capital formation, and to specify that qualifying payment stablecoins count as “cash” for purposes of proposed Rule 302(b). The company also called for dollar-based valuation treatment, appropriate accounting and customer-reserve treatment, and a reduction of the current 2% broker-dealer haircut to zero for GENIUS-compliant payment stablecoins, subject to objective safeguards.

The letter further asked the commission to clarify that technical services performed after a network becomes functional, including maintaining a known validator set, do not amount to essential managerial efforts. Circle said a safe harbor for technical roadmaps would allow issuers to maintain and improve functioning networks without inadvertently restarting that analysis.

The filing comes against the backdrop of the SEC’s proposed Regulation Crypto Assets, which remains a proposal as of October 28, 2026. The rulemaking record shows the proposal was issued on August 18, published in the Federal Register on August 21, and had a comment deadline of October 20. Separately, the SEC on October 1 proposed a crypto-custody framework for investment advisers and regulated funds, including conditional self-custody and use of state trust companies.

Because the SEC proposal has not been finalized, the practical effect of Circle’s requested changes remains uncertain. The agency has said antifraud and antimanipulation provisions would continue to apply even if the framework is adopted, and the proposed safe harbor is conditional rather than a blanket exemption.