FASB's proposed update would let stablecoins with on-demand redemption and segregated reserves sit in the cash equivalents line, removing a key hurdle for corporate treasuries. Comments due Nov. 19.
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The Financial Accounting Standards Board proposed on Tuesday that stablecoins meeting specific reserve and redemption requirements could be classified as cash equivalents under U.S. GAAP, a move that would place them on the same balance sheet line as Treasury bills and money market funds.
The proposal adds illustrative examples under the cash flow statement guidance. A qualifying stablecoin must offer a contractual right to redeem on demand directly with the issuer for a known cash amount, hold segregated reserves of at least one-to-one in short-term highly liquid assets, and disclose those reserves annually. The definition of cash equivalents itself is not changing, the board said.
Comments are due Nov. 19. The board will decide the effective date after reviewing them.
Current practice varies widely. One company treats USDC as cash-like while another books it as an other asset, distorting working capital comparisons across the same sector. Clearing that up removes one of the more persistent obstacles to public companies holding tokenized dollars for anything beyond a pilot, the board said.
The proposal also requires any entity presenting cash equivalents to disclose their significant components annually, a requirement that applies whether or not the company touches crypto. That parallels efforts like Mastercard's single-audit compliance test to standardize stablecoin transparency.
The pressure runs the other way for issuers. A cash-equivalent test built on reserve quality, segregation and on-demand redemption effectively rewards issuers that can document all three. Anything with a lockup, a redemption gate or opaque backing stays outside. Circle pushed for the project during FASB's agenda consultation, and President Trump's digital asset working group recommended in its July 2025 report that FASB consider treating payment stablecoins as cash equivalents.
FASB added the project to its technical agenda after taking it up last October and voted in April to draft the proposal. It builds on the board's 2023 standard requiring companies to measure bitcoin and other crypto assets at fair value, guidance that pointedly excluded stablecoins and non-fungible tokens. The accounting is arriving alongside the statutory framework: the GENIUS Act became law in July 2025, and Treasury proposed rules on who may issue and distribute payment stablecoins on Monday.
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