FASB Proposal Paves Way for Wider Adoption of USDC

Circle's co-founder Jeremy Allaire has praised the Financial Accounting Standards Board (FASB) for its proposal that would allow companies to classify qualifying stablecoins as cash equivalents.

The proposed update, published on August 18, aims to simplify accounting standards related to digital assets. To qualify, a token must meet three criteria: a contractual right of redemption on demand, direct redemption with the issuer for a known amount of cash, and segregated reserves of at least one dollar in short-term, highly liquid assets for each unit issued.

Allaire gave the proposal a rating of 9 out of 10, stating it could expand the use of USDC. He believes that this change would make it easier for companies to hold stablecoins on their balance sheets.