FASB Proposal Sparks Hope for Wider Stablecoin Adoption
Circle's co-founder Jeremy Allaire has hailed a recent accounting proposal from the U.S. Financial Accounting Standards Board (FASB) as an 'enormous strategic unlock' for stablecoins like USDC.
The proposal, which was released on August 18, would allow financial institutions and corporations to classify certain stablecoins as cash equivalents, making it easier for companies to hold tokens.
Allaire gave the proposal a rating of '9 out of 10', stating that it, combined with the passage of the GENIUS Act, would pave the way for wider usage of USDC.
The FASB has outlined three tests for stablecoins to be considered cash equivalents: on-demand contractual redemption rights, direct redemption with the issuer at a known amount, and segregated reserves worth at least $1 in short-term liquid assets per token in circulation.