FASB proposes rules to classify stablecoins as cash equivalents

The U.S. Financial Accounting Standards Board (FASB) has proposed new guidance that could allow companies to classify certain stablecoins as cash equivalents. This change aims to clarify whether specific digital assets meet the definition of cash equivalents, reduce diversity in accounting practices, and increase transparency regarding the components of cash reserves.

According to a report by the blockchain startup Tempo, this potential shift could remove significant hurdles for corporate stablecoin adoption. Currently, many stablecoin holdings do not automatically count toward reported cash reserves, even when backed by U.S. dollars. This discrepancy can create friction in corporate treasury operations, affecting liquidity reporting, liquidity ratios, and loan covenants.

The classification would depend on specific contractual terms, such as whether holders have a direct right to redeem the tokens for cash from the issuer. The FASB proposal also suggests requiring companies to disclose the significant components of their cash equivalents, including stablecoins, Treasury bills, and money market funds, in annual financial reports. The proposal is open for public comment until November 19, 2026.