Circle Urges SEC to Classify Stablecoins as Cash

In a comment letter filed October 20, the company advocated for a regulatory framework that aligns with the GENIUS Act. Circle contends that stablecoins redeemable one-for-one for dollars should be treated consistently when calculating offering limits or satisfying securities-for-cash provisions. By separating the token being purchased from the stablecoin used for settlement, the firm aims to ensure that stablecoin issuers are not inadvertently burdened by the compliance obligations of the fundraising companies.

Beyond payment classification, the issuer requested clarity on how the SEC views network maintenance. Circle specifically highlighted its Arc protocol, arguing that managing a validator set should be classified as routine technical support rather than essential managerial effort. This distinction is intended to allow developers to refine functional networks without triggering additional securities liabilities. Meanwhile, other industry players like the Hyperliquid Policy Center are separately lobbying the commission to address broader concerns, including secondary trading, airdrops, and the legal safe harbors for projects that claim no investment contract ever existed.