The Financial Accounting Standards Board (FASB) proposed new U.S. accounting guidance on Aug. 18 that would clarify when companies may present certain stablecoins as cash equivalents.

FASB is the private-sector board whose standards constitute U.S. GAAP, the framework public companies must apply in their SEC filings, so its decisions shape where assets appear on balance sheets and how cash flows are reported. Stablecoins — tokens designed to hold fiat value, mainly in dollars — have grown into a market with hundreds of billions of dollars in combined circulation, used for trading, payments and cross-border transfers.

The proposed Accounting Standards Update would add illustrative examples to Topic 230, Statement of Cash Flows. It would not change the existing definition of cash equivalents under U.S. generally accepted accounting principles (GAAP). FASB opened the proposal for public comment through Nov. 19, and the board will decide whether to issue a final standard, and set its effective date, after reviewing the responses.

JUST IN: 🏛 U.S. accounting-standards body proposes classifying stablecoins as cash equivalents for financial reporting. If adopted, corporate balance sheets could hold digital dollars with the same accounting treatment as T-bills. — BTC Live (@btcliveco) August 18, 2026

FASB would apply three stablecoin conditions

Under the proposal, a digital asset could qualify only if its holder has an on-demand contractual right to redeem it for cash, and that right must allow direct redemption with the issuer for a known amount. The issuer must also hold at least one-to-one reserves in segregated accounts. Those reserves would need to consist of short-term, highly liquid assets that are readily convertible into known cash amounts.

Meeting those conditions would not force a company to classify the token as a cash equivalent. Companies would retain the option to use that presentation and would still need to consider applicable laws and regulations.

The proposal is not final guidance. FASB said the examples are intended to "promote more consistent application" after stakeholders reported uncertainty and different accounting treatments during the board's 2025 agenda consultation.

Secondary trading would not replace redemption rights

One proposed example examines a token that trades actively on secondary markets but does not give the holder a direct right to redeem with its issuer. FASB concluded that market liquidity alone would not satisfy the existing cash-equivalent definition.

A liquid exchange market can allow a company to sell a token quickly, but its market price can move away from the promised value during periods of stress. Direct redemption provides a separate contractual route to receive a known cash amount.

Another example rejects cash-equivalent treatment when reserves include crypto assets and gold. FASB said price changes in those assets could prevent the holder from receiving a known amount of cash.

Taken together, the examples would exclude algorithmic tokens, overcollateralized crypto-backed products and other assets without direct issuer redemption, even when they use the stablecoin label.

U.S. companies currently use different treatments

FASB began the project because companies have reached different conclusions under existing GAAP. Some public companies already classify selected payment stablecoins as cash equivalents based on their redemption and reserve arrangements.

Coinbase voluntarily changed its accounting method effective Dec. 31, 2025. Its SEC filing says USDC, EURC and PYUSD are redeemable one-to-one and backed by cash equivalents in segregated accounts. The company applied the change retrospectively and said it did not alter previously reported assets, liabilities, equity, net income or earnings per share, although it changed portions of its cash flow presentation.

The classification carries more than presentational weight. Assets that meet the cash-equivalent definition sit outside the fair-value guidance FASB issued for in-scope crypto assets in December 2023, which took effect for public companies' fiscal years beginning after Dec. 15, 2024 and requires price changes to run through net income. The stablecoin project is the board's second major digital-asset initiative in recent years, and like the 2023 fair-value standard, it grew out of stakeholder requests collected during FASB's agenda consultations.

A final FASB standard could make those assessments more comparable across U.S. companies. It would not determine whether an issuer may legally offer a token, or whether reserves comply with federal rules.

Proposal arrives before federal rules take effect

The accounting proposal arrives as agencies implement the $GENIUS Act, which created the first federal framework for U.S. payment stablecoins. As previously reported, the law established new federal payment rules covering licensing, reserves, redemption and disclosures, and it generally takes effect in January 2027. Regulators have continued developing its operating requirements after missing the original rulemaking deadline.

The FASB conditions echo the federal law's reserve requirements, which similarly mandate one-to-one backing in high-quality liquid assets such as cash and short-term Treasuries.

The Treasury Department also recently opened a consultation on when tokens are issued, offered or sold in the United States. In related coverage, crypto.news examined Treasury's latest licensing proposal.

FASB's process remains separate from those regulatory proceedings. A token could satisfy federal issuance rules but still fail the accounting test if a particular holder lacks direct redemption rights or the reserves contain volatile assets.

The proposal would also require every entity reporting cash equivalents to disclose their major components and corresponding amounts. That requirement would apply even when no digital assets are included.

Stakeholders may submit written responses until Nov. 19. FASB will then consider revisions, decide whether to adopt the update, and determine when companies must begin applying it.

Source: crypto.news