Circle Urges SEC to Align Crypto-Asset Proposal with Payment-Stablecoin Rules

Circle has submitted a comment letter to the U.S. Securities and Exchange Commission (SEC), requesting that the agency clarify how qualifying payment stablecoins should be treated under its proposed crypto-asset rules. The company, a major issuer of USD Coin (USDC), argues that the SEC’s current proposal conflicts with existing and forthcoming payment-stablecoin regulations, and seeks alignment to avoid regulatory overlap. Circle’s request focuses on whether stablecoins that meet certain criteria—such as being fully backed by cash and cash equivalents—should be excluded from the SEC’s expanded definition of a security. This clarification matters because stablecoins are increasingly used for payments and remittances, and inconsistent treatment could stifle innovation or push activity offshore. While the SEC has not yet ruled on Circle’s position, the letter signals growing industry pressure for clear, coordinated oversight between the SEC and banking regulators. The outcome could shape how digital dollar tokens are issued and used in the U.S., affecting fintech firms, banks, and consumers. Circle’s move is a key test of whether regulators will treat payment stablecoins as part of the banking system rather than as speculative crypto assets.