The Financial Accounting Standards Board issued a proposed Accounting Standards Update on August 18 that would clarify when US companies may present certain stablecoins as cash equivalents under generally accepted accounting principles.
The proposal adds illustrative examples to Topic 230, Statement of Cash Flows, without changing the existing definition of cash equivalents. Public comments remain open until November 19, after which FASB will decide whether to issue a final standard and set the effective date.
Three Conditions for Classification
Under the proposed guidance, a digital asset could qualify only if the holder has an on-demand contractual right to redeem it directly with the issuer for a known cash amount. The issuer would also need to hold at least one-to-one reserves in segregated accounts, consisting of short-term, highly liquid assets readily convertible into known cash amounts.
FASB emphasized that meeting those conditions would not force classification as cash equivalents. Companies would retain the option and must consider applicable laws and regulations. The proposal explicitly rejects secondary market liquidity as a substitute for direct redemption rights, arguing that market prices can diverge from the promised value during periods of stress.
USDC, EURC, and PYUSD Among Likely Qualifiers
The proposal would also exclude tokens whose reserves include crypto assets and gold because price changes could prevent holders from receiving a known cash amount. Coinbase voluntarily changed its accounting method effective December 31, 2025, saying in an SEC filing that USDC, EURC, and PYUSD are redeemable one-to-one and backed by cash equivalents in segregated accounts.
The FASB proposal arrives as agencies implement the GENIUS Act, the first federal framework for US payment stablecoins, which generally takes effect in January 2027. Together the two create a coordinated infrastructure: the GENIUS Act establishes the regulatory floor for reserve rules and issuer requirements, while the FASB proposal provides the accounting ceiling for how those assets are treated on the books.
The proposal would also require all entities reporting cash equivalents to disclose their major components and amounts, even when no digital assets are included. Analysts say the guidance could accelerate institutional adoption of regulated stablecoins by removing accounting uncertainty that has kept corporate treasuries on the sidelines.
If finalized, the standard would mark the first time the US accounting framework formally addresses stablecoin classification. The move mirrors similar regulatory developments in Europe under MiCA and in Hong Kong, where authorities have begun issuing licenses to stablecoin issuers operating in the region.
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