The Financial Accounting Standards Board (FASB) has proposed new guidance that could allow some stablecoins to receive the same accounting treatment as cash equivalents.
The U.S. accounting standards setter issued the proposal Tuesday to address ongoing uncertainty over how stablecoins should be classified under generally accepted accounting principles (GAAP).
Under the proposed rules, stablecoins could qualify as cash equivalents if they are backed by liquid reserves that are at least equal to the value of tokens in circulation. The reserves would need to be disclosed annually, and the stablecoins would have to be redeemable for U.S. dollars on demand.
FASB said the proposed update would provide examples explaining how the existing definition of cash equivalents can apply to certain digital assets. The move is designed to bring greater consistency to stablecoin accounting, which currently can differ based on the circumstances and interpretation used.
If the proposal is adopted, eligible stablecoins could be grouped with other highly liquid, short-term assets treated as cash equivalents, including Treasury securities, commercial paper and money market funds.
FASB began working on crypto-specific accounting guidance in 2023. The latest proposal is outlined in an “accounting standards update,” which details the suggested changes and the rationale behind them.
The proposal is not yet final. FASB is accepting feedback from the public until Nov. 19 before deciding whether to adopt the new guidance.
