Proposal requires direct issuer redemption rights and one-to-one liquid reserves for stablecoins to qualify as cash equivalents.
The Financial Accounting Standards Board proposed new guidance allowing stablecoins to be classified as cash equivalents under US accounting rules. The update requires digital assets to have direct redemption rights with issuers and fully backed liquid reserves to qualify, excluding those reliant solely on secondary-market liquidity or non-cash reserves like crypto or gold.
Current accounting principles lack consistent treatment for stablecoins, leading to varied reporting practices. The proposal maintains the existing definition of cash equivalents but adds illustrative examples to clarify qualifying conditions. Companies would still decide whether to present eligible assets as cash equivalents, subject to legal and regulatory considerations.
Public comments on the proposal are open until November 19, after which the FASB will finalize an effective date based on stakeholder feedback.