NEW YORK — The cryptocurrency market is bracing for a seismic shift in institutional participation this Sunday, as Wall Street digests the U.S. Securities and Exchange Commission’s (SEC) landmark decision to slash capital requirements for broker-dealers holding payment stablecoins. The regulator’s new guidance, issued late last week, effectively reduces the capital "haircut" on qualified stablecoins from a prohibitive 100% to just 2%, treating them on par with low-risk money market funds. This regulatory pivot comes less than 24 hours before the highly anticipated trading debut of the first US-listed XRP and Dogecoin ETFs, setting the stage for what analysts are calling a "liquidity supercycle."

The 2% Rule: A Game Changer for Wall Street Liquidity

For years, SEC Rule 15c3-1 (the Net Capital Rule) acted as a de facto ban on broker-dealer adoption of digital assets. Under previous interpretations, firms holding stablecoins like USDC or PYUSD on their balance sheets were forced to write down their value by 100% for capital requirement purposes. This meant that for every $1 million in stablecoins held to facilitate settlement or trading, a firm had to hold $1 million in extra capital—a cost that made the business model economically unviable.

The new FAQ released by the SEC’s Division of Trading and Markets changes the calculus entirely. By lowering the haircut to 2%, the agency has signaled that it now views regulated "payment stablecoins"—those backed by U.S. Treasuries and cash under the recently passed GENIUS Act—as safe, liquid instruments. SEC Commissioner Hester Peirce, a long-time advocate for crypto regulatory clarity, described the move as essential, noting that "stablecoins are essential to transacting on blockchain rails" and that the previous treatment was "unnecessarily punitive."

Unlocking Billions in Idle Capital

This technical adjustment unlocks massive operational efficiency. Major prime brokers and market makers can now use stablecoins for 24/7 collateral management and real-time settlement without the heavy capital penalty. "This removes the single biggest friction point for institutional entry," says Luigi D’Onorio DeMeo, a market structure analyst. "We are effectively seeing the integration of crypto rails into the traditional broker-dealer model."

XRP and Dogecoin ETFs: The First Test

The timing of the SEC’s move is anything but coincidental. Tomorrow, Monday, February 23, 2026, marks the historic launch of the first spot ETFs for XRP and Dogecoin on major U.S. exchanges. Fund issuers, including Grayscale and Bitwise, have been preparing for this moment since the approval orders were signed, but liquidity concerns had lingered.

With the new 2% haircut rule in effect, market makers supporting these ETFs can now hold the necessary stablecoin inventory to facilitate creation and redemption mechanisms more efficiently. This is expected to tighten spreads and reduce volatility for the new products immediately upon launch. The XRP Dogecoin ETF launch is projected to attract significant retail and institutional volume, with some analysts predicting first-day inflows could rival the record-breaking Bitcoin ETF debuts of previous years.

Institutional desks that were previously hesitant to touch assets like Dogecoin due to settlement risks now have a regulator-sanctioned pathway to manage the liquidity using stablecoins. This legitimacy could propel these assets beyond their status as speculative tokens into recognized financial instruments.

Bitcoin Faces $69k Resistance Amidst Liquidity Flood

The broader crypto market is reacting positively to the convergence of favorable regulation and new investment products. Bitcoin is currently trading just below the psychological $69,000 resistance level, a price point that has capped rallies for weeks. Traders are betting that the influx of institutional liquidity enabled by the stablecoin rule change will provide the momentum needed to break through.

Unlike previous rallies driven by retail FOMO, the current market structure is being reinforced by deep-pocketed institutional players who can now operate with capital efficiency. "The pipes are finally connected," notes a senior trader at a major crypto-native hedge fund. "With the capital charge dropped to 2%, you're going to see banks and brokers holding stablecoin inventory overnight, smoothing out the volatility that usually plagues weekend trading."

A New Era of Regulated Crypto Adoption

The implementation of the GENIUS Act standards combined with this new SEC guidance represents the most significant step toward Wall Street crypto adoption to date. By treating payment stablecoins similarly to government money market funds, the U.S. is solidifying its stance that digital dollars are the future of financial settlement.

As markets open tomorrow, all eyes will be on the ETF volumes and the stability of the peg for major stablecoins. If the execution is smooth, the "2% rule" may be remembered as the moment crypto assets officially graduated from a speculative asset class to a core component of the global financial system.