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FASB Sets Three Conditions for Stablecoin Cash-Equivalent Status
FASB proposal defines three criteria for stablecoins as cash equivalents: demand redemption, direct claim on issuer, segregated liquid reserves. MiCA already requires this in the EU.
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The US Financial Accounting Standards Board published a proposal on 18 August 2026 that lays out when a stablecoin can be carried as a cash equivalent on a corporate balance sheet. The proposal names three conditions, and a token must meet all three at once, the board said. The comment period runs until 19 November 2026.
The trigger was straightforward: companies holding stablecoins told the board they did not know how to report those holdings. The result was inconsistent practice – one company booked them as cash equivalents, another did not, and balance sheets within the same sector became incomparable, the proposal said.
The first condition requires a contractual right to convert back into money on demand. The decisive word is contractual. A marketing promise on a product page is not a claim. A claim is set out in the terms of use, in the whitepaper or in the issuance agreement, and it is enforceable, the board said.
The second condition requires a direct right of redemption against the issuer for a known amount of money. Direct means you go to the issuer of the token and you get money, not to an exchange or an authorised partner. This is where most large dollar tokens break, the proposal's language suggests. The user agreement for Circle Mint states that the service is currently open exclusively to institutions in supported jurisdictions. At Tether, the Token Terms of Sale and Service state that redemption via the website is subject to minimum amounts and further requirements, and that the redemption price per USD₮ is one unit of the reference currency, less any applicable fees.