A proposed accounting change from the Financial Accounting Standards Board (FASB) could significantly ease corporate adoption of stablecoins by allowing qualifying tokens to be classified as cash equivalents on company balance sheets.
Under current accounting practices, stablecoin holdings do not count toward a company's reported cash reserves, which can affect liquidity ratios and loan covenants even when the tokens are fully backed by dollars. The FASB proposal, introduced in August, aims to change this treatment for corporate treasury operations.
Direct Redemption Rights Required
According to the proposal, companies would need to maintain direct redemption rights with stablecoin issuers to qualify for cash equivalent classification. This distinction is important: purchasing stablecoins through an exchange would not necessarily qualify, but holding them under a direct redemption agreement with the issuer would.
Coinbase offers a real-world example of this arrangement. The company classified USDC and other payment stablecoins as cash equivalents in its 2025 annual report, supported by its redemption arrangement with Circle, the stablecoin issuer.
Regulatory Timeline and Context
The FASB proposal remains open for public comment until November 19, after which the board will review feedback before finalizing the accounting changes and setting an effective date.
This accounting development follows the passage of the GENIUS Act in July 2025, which established the first comprehensive federal regulatory framework for payment stablecoins in the United States. The law is scheduled to take effect in January 2027, or 120 days after federal regulators finalize implementing rules, whichever comes first.
The market for US dollar-backed stablecoins has surpassed $300 billion, according to DefiLlama data. The Trump administration is reportedly exploring ways to promote dollar-backed stablecoins overseas, with potential involvement from the Treasury Department, State Department, and US International Development Finance Corporation.
