Circle, a provider of blockchain infrastructure, digital assets and applications, submitted these and other comments to the SEC on Oct. 20, the company said in a Wednesday (Oct. 28) blog post.
In these comments, Circle said it supports the SEC’s technology-neutral approach.
“This framework should accommodate permissionless institutional networks utilizing permissioned validators (i.e., an auditable set of known validators,) such as the Arc Network by Circle, as infrastructure for issuing, transferring and settling covered crypto assets,” Circle said in its comments. “Known validators provide additional security and functionality while retaining the permissionless nature of the blockchain.”
Circle also recommended in its comments that the SEC ensure that Regulation Crypto Assets operates consistently with the GENIUS Act, clarify the treatment for how GENIUS-compliant payment stablecoins may be used for consideration and settlement assets in capital formation, clarify that qualifying payment stablecoins qualify for appropriate accounting and customer-reserve treatment, reduce the current 2% broker-dealer haircut to zero for GENIUS-compliant payment stablecoins and clarify that technical services performed after a network becomes functional do not constitute essential managerial efforts, according to the post.
“Circle supports the Commission’s effort to create clear, technology-neutral rules for onchain capital formation,” Circle said in the letter. “Regulation Crypto Assets can help combine the strengths of traditional and onchain finance, provided that its treatment of payment stablecoins is coordinated with the GENIUS Act and reflects their legal and economic characteristics.”
The SEC proposed Regulation Crypto Assets on Aug. 18, saying in a press release that the proposed new rules would create a clear framework for certain investment contracts involving crypto assets.
The regulator said the proposed rule would be open for a 60-day comment period following its publication in the Federal Register. The proposed rule was published on Aug. 21 and the public comment due data was Oct. 20, according to an SEC page about Regulation Crypto Assets.
In the press release announcing the proposed rule, SEC Chairman Paul S. Atkins said: “As we continue the Commission’s efforts to provide clarity for crypto markets, and as Congress works to establish a lasting regulatory framework, Regulation Crypto Assets seeks to provide crypto asset entrepreneurs and market participants with clear pathways to raise capital under the federal securities laws.”
