The Financial Accounting Standards Board has proposed adding illustrative criteria that would let certain stablecoins be classified as cash equivalents on corporate balance sheets under US GAAP.
The proposal, issued as an Accounting Standards Update, does not change the existing definition of cash equivalents. Instead, it adds examples specifying when a stablecoin, or similar digital asset, would meet it. A qualifying asset must carry an on-demand contractual redemption right, a direct redemption right with its issuer for a known cash amount, and at least one-to-one reserves held in short-term, highly liquid assets. Cointelegraph
In practice, a token backed only by secondary-market trading liquidity would fall short. The holder needs a contractual claim on the issuer itself.
Reserves matter too. A token whose backing includes crypto assets or gold would be disqualified because the valuation risk in those holdings conflicts with the short-term, highly liquid standard the definition requires.
FASB, the private-sector nonprofit that sets US Generally Accepted Accounting Principles, framed the update narrowly. Not every dollar-pegged token would qualify. Companies would retain the choice of whether to present qualifying assets as cash equivalents, subject to relevant laws and regulations.
The proposal also carries a disclosure requirement. Companies would have to disclose annually the significant components of their cash equivalents, Treasury bills, commercial paper, stablecoins, money market funds, and the related amounts. That piece would apply to all entities that present cash equivalents, whether or not they hold digital assets.
The accounting update lands a year after the GENIUS Act, signed into law in July 2025, which created the first federal regulatory framework for payment stablecoins. That law requires permitted issuers to maintain one-to-one reserves in dollars and short-term Treasurys, publish monthly reserve details, and establish redemption procedures. The FASB criteria track those reserve and redemption expectations closely. The board’s proposal is accounting guidance, though, not regulation.
FASB is accepting public comments until Nov. 19. The board said it would set an effective date only after reviewing stakeholder feedback.
