The Financial Accounting Standards Board has proposed letting certain stablecoins qualify as "cash equivalents" under US accounting rules. The change would let companies holding fully backed, redeemable stablecoins report them alongside Treasuries and money market funds, and it opens a public comment period running until November 19.
FASB targets a specific accounting gap
FASB issued the proposal on Tuesday, responding to an ongoing dispute over how stablecoins should be treated on corporate books. Because no dedicated rule existed, the same token could be classified differently depending on which accounting approach a company applied.
Under the proposal, stablecoins with liquid reserves that at least equal the tokens in circulation, and that can be cashed in for dollars at will, can be treated as cash equivalents. FASB, which sets the accounting principles used by public companies across the country, would add stablecoins to a category that already includes Treasuries, commercial paper and money market funds.
The board is not creating a new asset category. Instead, it plans to add illustrative examples to ASC 230, the codification section covering cash flow statements, to show how the existing cash equivalent test applies to digital assets. That test requires an instrument to be highly liquid, carry a short maturity and pose minimal risk of a change in value.
Disclosure rules would also expand
Alongside the classification guidance, FASB would require companies to disclose the major classes and total dollar amounts of their cash equivalents every year. Investors will be able to see not just that a company holds cash equivalents, but how much of that sits in stablecoins versus traditional instruments.
The proposal builds on FASB's broader push into digital-asset accounting, which began in 2023. It is not yet final: the board has invited public comment on the draft update, with a deadline of November 19.
The distinction matters for issuers whose tokens meet the bar. For Circle and Tether, meeting FASB's implicit quality bar through reserve transparency and reliable redemption now carries a direct commercial benefit: their tokens become balance-sheet friendly.
Sources: CoinDesk, Crypto Briefing
Trading involves risk.
Risk Disclaimer
