Ripple proposes 0% haircut for stablecoins in 2026 SEC talks

Dialogue between the US Securities and Exchange Commission’s (SEC) Crypto Task Force and Ripple has emerged as one of the key developments expected to shape digital finance in 2026.

Ripple and SEC meet: A new era of dialogue

On March 20, 2026, Ripple met with the SEC to discuss how payment stablecoins and tokenized securities should be evaluated under existing net capital requirements and customer protection rules. The discussion also covered fresh regulatory frameworks as tokenization is set to become increasingly common in financial markets.

Following these meetings, Ripple formally submitted a letter to the SEC on May 22, 2026. The company outlined a proposed regulatory framework designed to reduce uncertainty for brokers, custodians, and institutional stakeholders.

“Cash equivalent” status for stablecoins

Ripple’s proposal centers around recognizing fully collateralized payment stablecoins as high-quality collateral. It advocates that stablecoins like RLUSD, when issued through a transparent “mint-burn” system and backed by reliable assets, should be treated as cash-like payment instruments. The goal is to allow institutional market participants to use these digital assets as collateral without facing significant capital burdens.

Ripple’s new approach also calls for removing the capital haircut imposed on stablecoin reserves. With a direct request for a “0% haircut” on RLUSD and similar digital assets, the company aims for these assets to be recognized as highly liquid, low-risk instruments readily convertible to cash.

Mini glossary: In financial markets, a “haircut” refers to the mandatory reduction applied to the value of an asset when accepted as collateral. Riskier assets incur higher haircuts, while safer ones have very low or even zero haircuts.

Function-based classification and focus on XRP

Ripple has called for digital assets to be reviewed based on their function rather than labels. Using XRP as an example, the company has requested that digital assets with roles comparable to established cryptocurrencies like BTC and ETH be subject to the same capital rules when serving similar functions.

The company argues that applying different capital requirements to assets with equivalent uses creates friction in the market and undermines stable liquidity management.

On-chain records and transparency initiative

Ripple proposes integrating a centralized on-chain records system for tokenized securities and transaction history. By transitioning from traditional, fragmented, and opaque systems to blockchain-based platforms, ownership and transfers could be tracked more efficiently and transparently.

Ripple emphasized in its letter to the SEC, “A new regulatory framework based on asset functionality would take institutional markets forward in terms of both liquidity and transparency.”

The overall aim of these proposals is to modernize market infrastructure so that institutional investors can utilize tokenized assets more securely and efficiently.