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FASB proposes conditions for stablecoins to be treated as cash equivalents

Under the proposal, secondary-market liquidity would not be sufficient on its own, and stablecoin reserves would need to be one-to-one with token value.

Reported · Written up by our desk · Regulation

Cointelegraph reports that the U.S. Financial Accounting Standards Board, FASB, has proposed conditions under which stablecoins could qualify as cash equivalents in accounting.

The proposal says secondary-market liquidity alone would not meet the standard, and that holders would need direct issuer redemption rights.

It also outlines reserve requirements, stating that stablecoin reserves should be liquid and matched one-to-one with the value of the tokens.

The effort reflects FASB's view that cash equivalent treatment requires both redemption access and adequate, fully liquid reserves, not just trading activity in secondary markets.

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