Regulatory Roundup #13

Summary

The SEC's Division of Trading and Markets delivered one of the most consequential pieces of crypto infrastructure guidance in months, slashing the net capital haircut on stablecoins from 100% to 2% and effectively telling broker-dealers that stablecoins are real money for balance sheet purposes. SEC Chair Atkins then laid out a 2026 agenda so ambitious it reads like a crypto startup's Series A pitch deck. California is opening the gates for digital financial asset licensing but Poland has vetoed its MiCA implementing law for the second time (making it the EU’s most committed regulatory holdout). In Japan, the FSA’s FIEA reclassification bill edges closer to parliament, promising to drop the crypto tax rate from 55% to 20% and put digital assets on the same legal footing as stocks. 

🔦 Spotlight

💵 SEC cuts the stablecoin haircut: from write-off to write-on

On 19 February, the SEC's Division of Trading and Markets published a staff FAQ that may look like routine guidance but amounts to a quiet revolution in how broker-dealers interact with stablecoins. The core change: broker-dealers can now apply a 2% haircut to proprietary positions in payment stablecoins when calculating net capital under Exchange Act Rule 15c3-1, rather than the 100% haircut that has been the effective treatment until now.

To put that in plain numbers, under the old regime, a broker-dealer holding $1 million in stablecoins would have needed $2 million in capital to back the position, because the entire stablecoin holding was treated as though it might be worth zero. Under the new guidance, the same firm needs just $20,000 in additional capital. That is a 98% reduction in the capital burden, bringing stablecoins in line with how broker-dealers treat registered money market funds. The haircut reflects what most market participants already know: payment stablecoins backed by US dollars and short-term Treasuries behave a lot more like cash equivalents than like speculative tokens.

Commissioner Hester Peirce framed the move as a practical necessity, noting that the previous 100% haircut "would be unnecessarily punitive given the underlying reserve assets that back payment stablecoins" and that stablecoins are "essential to transacting on blockchain rails." She also drew a direct line to the GENIUS Act: once the stablecoin legislation takes effect, the reserve requirements for permitted payment stablecoin issuers will actually be more restrictive than the "eligible securities" requirements governing government money market funds, further justifying the preferential treatment.

The practical implications extend well beyond a capital calculation. With the haircut effectively neutralized, broker-dealers now have a credible pathway to hold stablecoins for settlement purposes, provide custody of tokenized securities that settle on-chain, and offer stablecoin-denominated liquidity to clients. These are activities that have been economically impractical while stablecoins ate a 100% capital charge. The FAQ also addresses how Rule 15c3-3 (the customer protection rule) applies to crypto asset securities and clarifies conditions under which distributed ledger technology can support transfer agent recordkeeping.

There are, however, caveats worth noting. This is staff guidance, not formal rulemaking, which means it reflects Division views and has no independent legal force. A future Commission could revisit the position, and the guidance comes with conditions around the definition of "payment stablecoin" and the requirement that the issuer's reserves meet certain quality thresholds. Still, for broker-dealers and their counterparties, the signal is unmistakable: the SEC is actively clearing regulatory obstacles that have kept traditional intermediaries on the sidelines of on-chain markets. Combine this with Chair Atkins' broader agenda (see below), and the direction of travel looks a lot like an invitation for Wall Street to show up.

🌎 Global Developments

🇺🇸 United States

📋 Atkins lays out a 2026 crypto agenda that reads like a manifesto

SEC Chair Paul Atkins used an 18 February appearance at ETHDenver with Commissioner Peirce to lay out the most comprehensive SEC crypto agenda in memory. The highlights read less like a regulatory to-do list and more like an attempt to rebuild the SEC's relationship with an industry that spent the last four years ducking enforcement actions.

The headline item is guidance on how to determine whether a digital asset constitutes an investment contract, something market participants have been begging for since the Howey test started feeling like a personality quiz. Atkins also flagged work on innovation-based exemptions that could cover automated market maker (AMM) platforms, broker-dealer custody rules for non-security crypto tokens, transfer agent modernization to accommodate blockchain-based recordkeeping, and guidance on wallet interfaces and user-facing applications. 

If even half of this agenda lands, it would represent a material shift in the regulatory environment for digital assets in the US. The open question, as always, is whether the SEC can deliver policy at the speed the industry needs, or whether this is another ambitious roadmap that ends up in the same filing cabinet as previous "strategic priorities." The Crypto Task Force continues to hold public roundtables, but Congress still has not given the SEC (or the CFTC) the legislative foundation that would make much of this agenda durable. On that note…

🏛️ CLARITY Act: April or bust?

The Digital Asset Market Clarity (“CLARITY”) Act remains the market's best candidate for comprehensive crypto legislation, and after weeks of silence following the January markup postponement (covered in Issue #11), some cautious optimism has resurfaced. Ripple CEO Brad Garlinghouse has publicly put the odds of passage at "80% by end of April," while Goldman Sachs CEO David Solomon described a rule-based framework for digital assets as "very important" for market development. Senator Moreno, one of the bill's sponsors, echoed the April target.

The core sticking points, however, have not evaporated. The stablecoin yield dispute, which helped derail the January markup, remains unresolved: banks want restrictions on platforms paying rewards on stablecoin balances, while crypto firms argue this is protectionism wearing a regulatory hat. DeFi perimeter questions and ethics provisions around officials' crypto entanglements continue to simmer. The practical reality is that April is plausible but far from certain, and any further delay pushes the bill into the gravitational field of the November 2026 midterms, where bipartisan goodwill tends to go to die.

🌟 California opens the DFAL licensing gates

California's Department of Financial Protection and Innovation (DFPI) announced on 19 February that license applications under the Digital Financial Assets Law (DFAL) will open via NMLS on 9 March 2026, with a compliance deadline of 1 July 2026. The DFAL, signed into law in 2023, requires businesses engaging in digital financial asset activities with California residents to obtain a license, covering activities such as exchange, transfer, administration, and custody of digital financial assets.

For firms operating in the US, the California deadline represents one of the more consequential state-level compliance milestones of 2026. Given California's market size and its historical willingness to set a regulatory pace that others follow, firms that have been treating the DFAL as a future problem now have a four-month runway to get applications submitted. The licensing framework sits alongside California's existing money transmission regime and adds specific requirements around cybersecurity, disclosures, and consumer protection that go beyond what many platforms have implemented for other state licenses.

🇬🇧 United Kingdom

📋 FCA stablecoins get going (under adult supervision)

The UK Financial Conduct Authority has selected four firms - Monee Financial Technologies, ReStabilise, Revolut, and VVTX - to participate in its Regulatory Sandbox stablecoins cohort, whittling down 20 hopeful applicants in what was apparently the most competitive audition since the last season of The Great British Bake Off. Beginning in Q1 2026, the chosen firms will get to test their stablecoin products in real-world conditions in what is essentially a supervised playground where regulators and innovators can figure out the rules of the game before anyone breaks anything expensive.

The initiative is part of the FCA's broader crypto roadmap, which is substantively complete on consultations (a minor miracle in regulatory terms), with final policy statements expected this summer and a full authorization regime going live in October 2027, giving the industry just enough time to panic-prepare.

🇪🇺 European Union

🇵🇱 Poland vetoes MiCA implementation. Again.

In a move that is starting to feel less like a policy dispute and more like performance art, Polish President Dariusz Nawrocki vetoed the country's MiCA implementing legislation for the second time in two months. The latest Bill 2064, sent to Parliament in early February, was reportedly "practically identical" to the December 2025 Bill 1424 that Nawrocki vetoed before (covered in Issue #10). The only material change: the supervisory fee cap was reduced from 0.4% to 0.1% of average gross revenues. Nawrocki evidently felt that this concession was not enough to address his broader concerns about excessive supervisory powers, including the ability to order telecom companies to block domains and freeze client accounts for extended periods.

The practical consequences are now becoming acute. Poland's MiCA transition period expires on 1 July 2026, and without implementing legislation, there will be no designated competent authority to receive CASP license applications, no functioning fee framework, and no sanctions toolkit behind MiCA. VASPs currently operating under grandfathering arrangements are staring at a cliff edge: when the transition period ends, they will have no legal basis to continue providing crypto-asset services in Poland.

Domestic firms are already voting with their feet. Reports indicate that Polish crypto companies are exploring licenses in Lithuania, Estonia, Latvia, and Malta as contingency plans. Poland's Deputy Finance Minister has publicly warned that continued deadlock will drive businesses abroad and reduce tax revenues. The irony is thick: a country that is home to a sizable and active retail crypto market may become the only EU member state where regulated crypto-asset services cannot legally operate after 1 July, not because of opposition to crypto, but because of a political standoff over how aggressively the supervisor should be armed.

🌏 Asia-Pacific

🇭🇰 Hong Kong licenses first new virtual asset platform in eight months

Hong Kong's Securities and Futures Commission (SFC) granted a virtual asset trading platform (VATP) license to Victory Fintech, operating as VDX, on 13 February 2026. The license is the first new VATP approval since 17 June 2025, bringing the total number of licensed platforms to twelve. The gap in licensing had led to some industry chatter about whether the SFC was hitting pause on new approvals, so the VDX license provides at least a mild signal that the pipeline remains open.

For Hong Kong’s ambitions as a regional digital asset hub, the pace of licensing remains a key indicator. The city’s regulatory framework is comprehensive, but the relatively slow throughput of approvals contrasts with the speed at which competing jurisdictions like the UAE and Singapore have been onboarding platforms. VDX joins a field that includes HashKey, OSL, and HKVAX, among others, and its license covers both retail and professional investor services. Whether the approval marks the start of a faster cadence or remains a one-off will be closely watched by firms still in the SFC’s queue.

🇯🇵 Japan’s FIEA reclassification: from payments regime to securities framework

Japan’s Financial Services Agency (FSA) is pressing ahead with what amounts to the most fundamental reclassification of crypto assets in any major economy. The public consultation on moving approximately 105 approved cryptocurrencies, including Bitcoin and Ether, from the Payment Services Act to the Financial Instruments and Exchange Act (FIEA) closed on 27 February, with the implementing bill expected to be submitted to the ordinary Diet session in the coming weeks. If passed, digital assets in Japan would sit under the same regulatory architecture as stocks and bonds, complete with mandatory disclosure requirements, insider trading prohibitions, and exchange liability reserves.

The package is sweeping. The FSA proposes cutting the capital gains tax on crypto from up to 55% (the current progressive “miscellaneous income” rate) to a flat 20%, aligning it with equities and introducing a three-year loss carryforward mechanism for the first time. The Securities and Exchange Surveillance Commission (SESC) would gain investigation authority over crypto market abuse, and exchanges would face liability reserve requirements mirroring those of traditional securities firms. Finance Minister Katayama has declared 2026 “the first year of digital,” positioning the reforms as central to a broader push to shift Japan’s famously conservative savings culture into growth-oriented investment.

The reclassification also opens a legal pathway for spot Bitcoin ETFs. Major asset managers including Nomura and SBI are reportedly preparing applications, with the first products potentially launching in the second half of 2026. Japan would become one of the first major economies to combine a comprehensive securities-law framework for crypto with a credible route to regulated, retail-accessible investment products.

Not everyone is cheering. Industry bodies have noted that around 90% of Japanese crypto exchanges are operating at a loss, and the compliance burden of a full securities-law regime could be heavy-handed for smaller platforms. The reforms are a direct response to the Mt. Gox collapse in 2014 and the DMM Bitcoin hack ($305 million in May 2024), so the FSA’s appetite for caution is understandable. But the scale of the regulatory pivot, comparable in ambition to the EU’s MiCA or the US GENIUS Act, means the practical implementation will need careful calibration to avoid crushing the market it is trying to professionalize.

🇵🇰 Pakistan launches a regulatory sandbox for digital assets

Pakistan’s Virtual Assets Regulatory Authority (VARA) launched a regulatory sandbox on 20 February, allowing digital asset and Web3 companies to test products and services under government-monitored conditions. The sandbox is designed to let regulators observe before they legislate, a sensible approach for a jurisdiction where crypto adoption has been running well ahead of any formal framework.

The move is notable for two reasons. First, Pakistan is one of the fastest-growing crypto markets in Asia, driven largely by remittance flows and a young, mobile-first population. Second, the sandbox approach signals a regulator that wants to understand the market before locking in permanent rules, a pragmatic starting point for a jurisdiction where crypto adoption has been running well ahead of formal oversight. If the sandbox produces workable data on consumer protection and AML controls, it could accelerate Pakistan’s path to a fuller regulatory framework and give local fintech firms a degree of legitimacy that has so far been missing.

🔎 Things to Watch

• 🇺🇸 CLARITY Act: will the Senate deliver by April, or will the stablecoin yield fight and midterm gravity pull it off course?
• 🇺🇸 GENIUS Act implementation: final regulations due by 18 July 2026. Treasury rulemaking on reserves, disclosures and anti-abuse tooling is underway.
• 🇺🇸 California DFAL: license applications open 9 March via NMLS; compliance deadline 1 July 2026.
• 🇵🇱 Poland: MiCA transition period expires 1 July 2026. Without implementing legislation, domestic CASPs face an existential legal vacuum.
• 🇯🇵 Japan: FIEA reclassification bill expected to be submitted to the Diet imminently. If passed, crypto moves to a full securities-law framework with 20% flat tax, insider trading rules and spot ETF pathway.

Coming into view:

• 🇬🇧 Further FCA consultations and final rules for the UK crypto regime.
• 🇪🇺 EU Markets Integration & Supervision (MIS) package negotiations: the future of centralized ESMA supervision for all CASPs.

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