FASB Proposes Cash-Equivalent Status for Certain Stablecoins Held by Corporates

The US Financial Accounting Standards Board (FASB) has put forward a proposal that would allow companies to classify certain stablecoin holdings as cash equivalents on their balance sheets. Under the proposed rules, a corporate holder would need a direct relationship with the stablecoin issuer and the ability to redeem those holdings on demand, conditions that suggest the treatment is likely to apply only to entities with material stablecoin positions.

The proposal addresses a genuine inconsistency that has made corporate treasury adoption of stablecoins harder to justify. Without clear guidance, some entities have treated stablecoin holdings as intangible assets subject to mark-to-market pricing, while others have recorded them as receivables. Neither approach has been uniformly applied, and the practical stakes are significant: lenders’ liquidity calculations treat cash equivalents far more favourably than intangibles, meaning the existing ambiguity has a direct cost in how creditworthiness is assessed.

FASB’s existing cash-equivalent framework requires assets to be highly liquid and have a maturity of three months or less. For stablecoins, the proposal adds three further conditions: a contractual right to redeem on demand for cash, direct redemption with the issuer at a defined cash amount, and issuer-held reserve assets segregated on at least a one-to-one basis in short-term, highly liquid instruments. Those conditions raise immediate market-structure questions. Among them is whether indirect redemption via a third party would be sufficient, and whether widely held stablecoins such as Tether would satisfy the direct-issuer-relationship requirement. FASB has not answered those questions in this proposal.