FASB Weighs Letting Stablecoins Count as Cash on Company Books

The Financial Accounting Standards Board is reviewing a proposal that could let US companies classify certain stablecoins as cash equivalents on their balance sheets, a change that would remove one of the quieter obstacles to corporate treasuries holding dollar-pegged tokens. Tempo, the Stripe-backed blockchain, published a report on October 12 analyzing the proposal, which FASB issued in August and has opened for public comment until November 19.

The distinction at the heart of the proposal is narrow but consequential: a stablecoin would only qualify as a cash equivalent if the holder has a direct redemption right with the issuer, rather than simply holding the token itself. That condition matters because it separates stablecoins backed by an enforceable claim on the issuer’s reserves from tokens that merely trade at a stable price without a contractual guarantee behind them.

Why accounting rules have lagged behind stablecoin adoption

Stablecoins have grown into a market worth more than $300 billion by US dollar value, according to DefiLlama, yet the accounting treatment of these assets has not kept pace with their use in payments and corporate finance. Under current rules, stablecoin holdings often fail to qualify as cash reserves on a balance sheet, even when a company can redeem them for dollars on demand. That gap can distort liquidity ratios and complicate loan covenants, both of which are closely watched by lenders, auditors and credit rating agencies.

Coinbase has already tested the logic the FASB proposal would formalize. The exchange classifies its USDC holdings as a cash equivalent in its 2025 annual report, citing a direct redemption agreement with Circle, the issuer of USDC. That arrangement illustrates the practical difference the FASB is trying to codify: it is not the stablecoin itself that determines accounting treatment, but the strength of the redemption relationship between holder and issuer.

The proposal also arrives alongside a broader federal effort to define how stablecoins operate in the US financial system. The GENIUS Act, passed in July 2025, is the first comprehensive federal framework for payment stablecoins, setting requirements for issuers around reserve backing and redemption obligations. Its effective date is set for January 2027, or 120 days after implementing rules are finalized, whichever comes first. Notably, the law addresses how issuers must operate but stays silent on how corporate holders should account for stablecoins on their own books — the exact space the FASB proposal is now moving to fill. Regulators have continued scrutinizing the redemption mechanics behind stablecoin reserves from other angles as well, including a recent warning from the Financial Stability Board about redemption crises even among fully backed tokens, and a Federal Reserve rule that imposes a tight window for addressing reserve shortfalls.

What the change would mean for corporate treasuries

If finalized, the FASB proposal would address a structural disincentive that has kept many corporate treasuries at arm’s length from stablecoins. A company weighing whether to hold a dollar-pegged token for payments or working capital has had to consider not just regulatory risk, but whether that holding would help or hurt its reported liquidity position. Removing that accounting penalty — for stablecoins with genuine redemption rights — could make holding them a more straightforward treasury decision rather than one that requires footnotes and justification to auditors.

This is not a blanket endorsement of all stablecoins. The redemption-rights condition means issuers without clear, direct, contractual redemption arrangements would not benefit from the more favorable accounting treatment, even if their tokens are fully reserved. That creates an incentive structure favoring issuers like Circle that have built explicit redemption agreements with large institutional holders, and it could push other issuers to formalize similar arrangements if they want their tokens treated as cash equivalents by corporate counterparties.

The timing also matters. With the GENIUS Act’s effective date approaching in 2027 and federal stablecoin oversight taking shape, the FASB’s move suggests accounting standard-setters are trying to align financial reporting rules with a regulatory framework that is still being finalized. Separately, reports that the Trump administration is exploring partnerships with private firms — potentially involving the Treasury Department, State Department and the US International Development Finance Corporation — to promote dollar-backed stablecoins internationally suggest the push to normalize stablecoin use extends beyond domestic accounting questions into broader dollar policy.

What to watch next

The public comment period running through November 19 will be the first real test of how accountants, issuers and corporate treasurers respond to the redemption-rights standard. Key questions to track include whether FASB narrows or broadens the definition of a qualifying redemption right, how the final rule interacts with the GENIUS Act’s implementation timeline, and whether other major stablecoin issuers move to establish redemption agreements comparable to Circle’s. Corporate filings in coming quarters may also reveal whether more companies begin classifying stablecoin holdings as cash equivalents in anticipation of the rule change.

Source: Cointelegraph

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