Written by Ezra Reguerrastaff writerReviewed by Yohan Yunstaff editor

Written by Ezra Reguerrastaff writer

Reviewed by Yohan Yunstaff editor

US accounting board FASB proposes conditions for stablecoins as cash equivalents

Latest NewsPublishedAug 19, 2026

The FASB stated secondary-market liquidity alone would not be enough, with holders needing direct issuer redemption rights and one-to-one liquid reserves.

The Financial Accounting Standards Board (FASB) has proposed guidance outlining when companies may classify certain stablecoins as cash equivalents under generally accepted accounting principles in the United States. 

On Tuesday, the FASB stated the proposed Accounting Standards Update would add illustrative examples to the current definition, addressing inconsistent treatment of digital assets such as stablecoins. The definition itself would remain unchanged. 

The proposal says a qualifying digital asset would need an on-demand contractual redemption right, a direct redemption right with its issuer for a known cash amount and at least one-to-one segregated reserves held in short-term, highly liquid assets. 

One example stated active secondary markets would not be enough if the holder lacks a direct issuer redemption right. Another example stated reserves comprising crypto assets and gold would disqualify a token due to valuation risks. 

Companies would retain the choice of whether to present qualifying assets as cash equivalents and would need to consider relevant laws and regulations. 

FASB is accepting public comments on the proposed update until Nov. 19. The organization will set an effective date after reviewing stakeholder feedback. 

Related: Tether says ‘Big Four‘ firm to handle first full audit of USDT reserves

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• Stablecoin
• Cash
• United States
• Blockchain

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