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FASB proposes treating certain stablecoins as cash equivalents

The draft would classify stablecoins with liquid, disclosed reserves at least equal to circulating tokens as cash equivalents, and it is open for public comment until Nov. 19.

Reported · Written up by our desk · Regulation

CoinDesk reports that the Financial Accounting Standards Board, which sets accounting rules for U.S. generally accepted accounting principles, has proposed allowing certain stablecoins to be treated as cash equivalents.

In the proposal, FASB says stablecoins with liquid reserves, where the reserve contents are disclosed each year, and reserves that are at least equal to circulating tokens could qualify as cash equivalents because the tokens can be cashed in for dollars at will.

The board said the update would clarify how the current definition of cash equivalents applies to certain digital assets, addressing disputes over whether stablecoins should be viewed the same as cash and how that affects accounting treatment.

FASB noted that it is not making a final determination yet, and it is inviting public comments until November 19.

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