- The FASB proposed new guidance on classifying certain stablecoins as cash equivalents under U.S. accounting rules.
- Holders must have a direct, on-demand redemption right with the issuer for a known cash amount to qualify.
- Issuers must maintain at least one-to-one segregated reserves in short-term, highly liquid assets.
The Financial Accounting Standards Board (FASB) proposed new guidance on Tuesday clarifying when companies can classify specific stablecoins as cash equivalents under U.S. generally accepted accounting principles. The FASB said the proposed Accounting Standards Update would add illustrative examples to the existing definition, addressing inconsistent treatment of digital assets.
The definition itself remains unchanged, but secondary-market liquidity alone will not qualify an asset. The proposal says a qualifying digital asset must provide an on-demand contractual redemption right directly with its issuer for a known cash amount. Additionally, the stablecoin must be backed by at least one-to-one segregated reserves held in short-term, highly liquid assets.
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