FASB Proposes Stablecoin Standard as Cash Equivalent

The US Financial Accounting Standards Board (FASB) has proposed a new standard that would allow companies to classify certain stablecoin holdings as cash equivalents.

This move aims to clarify accounting treatment for stablecoins, which have been inconsistent in the past. Some entities have treated them like other crypto assets, while others have accounted for them as receivables.

To qualify as a cash equivalent under this proposal, stablecoin holders must have a direct relationship with the issuer and the ability to redeem them on demand.

FASB's general requirements for cash equivalents include high liquidity and maturity of three months or less. The proposed standard adds three additional features: contractual on-demand cash redemption right, direct redemption with the issuer, and segregated reserve assets held by the issuer.