FASB proposes treating some stablecoins as cash equivalents
The accounting board says fully reserved, dollar-redeemable stablecoins could qualify as cash equivalents under a new proposal open for comment through Nov. 19.
By The Third AnglePublished 3 min read
Illustrative accounting-document imagery for a proposed stablecoin reporting change; the image does not depict FASB's offices or a specific issuer. Photo: Unsplash · Unsplash License
The Financial Accounting Standards Board has proposed a way for some stablecoins to be treated as cash equivalents under U.S. accounting rules. The board's proposal would apply to digital assets with liquid reserves at least equal to the tokens in circulation, annual reserve disclosures and the ability to be redeemed for dollars on demand.
The proposal is open for public comment until Nov. 19. It is not a final accounting rule, and it does not classify stablecoins as bank deposits or guarantee that an issuer will meet every redemption request.
What the proposal would change
FASB says the proposed amendments would clarify how the existing definition of cash equivalents applies to certain digital assets. The relevant comparison is with highly liquid assets such as Treasury bills, commercial paper and money-market funds, not with the legal status of a bank account.
CoinDesk reported that the board issued the update after a dispute over whether stablecoins should receive different accounting treatment depending on how the question is interpreted. The proposed approach would give companies a more specific framework for making that assessment.
Still a reporting decision, not a legal upgrade
A cash-equivalent treatment would affect financial reporting and disclosures. It would not turn a stablecoin into insured money, remove issuer, reserve or redemption risks, or settle the separate regulatory questions that apply to issuers, distributors and holders.
The practical test will be which tokens can document the proposed conditions consistently: reserve coverage, redemption at par, liquidity and recurring disclosures. Until FASB completes the process, companies will still need to explain the judgments behind their accounting treatment.
