FASB Proposal Would Let Companies Book Qualifying Stablecoins as Cash Equivalents

Redemption Rights Decide the Classification

A change in US accounting rules is moving forward that could reshape how corporations report token holdings. The Financial Accounting Standards Board (FASB), the body that writes financial reporting standards for US companies, proposed an Accounting Standards Update in August that would let firms classify qualifying stablecoins as cash equivalents on their balance sheets. Under current practice, such holdings may not count toward reported cash reserves even when the tokens are fully backed by dollars, which can distort liquidity ratios and complicate loan covenants. Cash equivalents, in corporate reporting, are assets so liquid they are treated as cash itself, a category dollar-backed tokens have sat uneasily outside. The draft's deciding condition is a contractual right to redeem tokens directly with the issuer. Buying USDC through an exchange would not, on its own, satisfy the requirement. A report from Tempo, the blockchain project backed by payments firm Stripe, examines the proposal and argues it could remove the last major barrier to corporate adoption. Its authors state that “your contract with the issuer is what qualifies, and the token alone doesn’t get you there.” The report cites one working precedent: Coinbase Global classified USDC and other payment stablecoins as cash equivalents in its 2025 annual report, relying on its redemption arrangement with Circle. The accounting label carries weight beyond presentation. Tokens excluded from cash leave reported liquidity looking thinner than it is, which affects liquidity metrics and the terms of borrowing agreements. Companies that use stablecoins for payments and settlements would be able to do so without those complications once a final standard is in force. The FASB has kept the proposal open for public comment until Nov 19, and the board will review the submissions before finalizing the changes and setting an effective date, neither of which is fixed yet.

GENIUS Act and a $300 Billion Market

The proposal lands while the United States is also building the regulatory layer beneath issuance. Congress passed the GENIUS Act in July 2025, the first comprehensive federal framework for payment stablecoins. The law is scheduled to take effect in January 2027, or 120 days after federal regulators finalize implementing rules, whichever comes first, giving issuers a defined runway to prepare. The statute binds issuers directly, requiring reserve backing and redemption obligations. Its architecture is built around reserve-backed payment tokens, a design distinct from algorithmic stablecoins, which hold their peg without collateral reserves. The FASB draft addresses a different question: how the companies that hold these tokens account for them on the balance sheet. Scale is no longer hypothetical. Data from DefiLlama places the market for dollar-backed stablecoins above $300 billion. Policy interest reaches past domestic accounting as well. The Trump administration is reportedly weighing partnerships with private companies to promote dollar-backed stablecoin projects overseas, an initiative that could involve the Treasury Department, the State Department and the US International Development Finance Corporation. The aim is to reinforce the dollar's position as the dominant reserve currency through payment rails that settle instantly, rather than through correspondent banking chains. Read together, the two texts form a single pipeline: issuance rules from Congress, holder accounting from the FASB, and a market already deep enough for the changes to register. For corporate treasurers, the sequencing is the point. The GENIUS Act settles who may issue and under what reserve standards; the FASB proposal settles what those tokens are worth on a balance sheet. Until both are finalized, a company adopting stablecoin payments faces regulatory clarity on the issuance side and accounting uncertainty on the holding side, a mismatch the August draft is meant to close.

The Issuer Contract Bottleneck

The narrowest clause may end up mattering most. Because classification hinges on a contract with the issuer, adoption is likely to concentrate among firms large enough to negotiate direct redemption terms; companies that acquire tokens through exchanges or brokers could still carry them outside cash, blunting the benefit the draft promises. Token models that promise a return, such as yield-bearing stablecoins, raise questions the proposal does not address, since the test looks at redemption rights rather than economics. Read alongside the GENIUS Act timetable, the earliest realistic point at which both issuer rules and balance-sheet treatment settle is early 2027. That is when payment use by corporates could credibly scale, and it leaves issuers roughly a quarter to absorb whatever comes out of the comment period.