The Financial Accounting Standards Board, or FASB, on Tuesday released a proposed accounting standards update that would clarify when digital assets qualify as cash equivalents under U.S. generally accepted accounting principles.
If adopted, a qualifying stablecoin could be reported on the same balance-sheet line as Treasury bills, commercial paper, and money market funds. FASB is not changing the definition of cash equivalents. It is adding illustrative examples to cash flow statement guidance to show which assets would meet the existing threshold.
What the proposal says
Under the proposal, the examples point to several features. The holder would need a contractual right to redeem directly with the issuer on demand for a known amount of cash. Reserves would need to be segregated at at least a one-to-one ratio and held in short-term, highly liquid assets. Those reserves would also need to be disclosed annually.
A separate section of the proposal would require any entity that presents cash equivalents to disclose their significant components each year. That disclosure requirement would apply whether or not the company has exposure to crypto.
Comment period and accounting impact
Comments on the proposal are due Nov. 19. FASB said it will decide the effective date after reviewing the feedback.
Under current practice, one company may treat USDC as cash-like while another records it as an other asset. That creates uneven working-capital comparisons inside the same sector and can turn stablecoin payments into an accounting choice instead of a treasury one.
Clarifying the treatment would remove one of the routine but persistent barriers that has limited public companies from holding tokenized dollars beyond pilot use.
Pressure on issuers
The proposed cash-equivalent test would also put pressure on issuers. A framework built around reserve quality, reserve segregation, and on-demand redemption would favor issuers that can document all three. Stablecoins with a lockup, a redemption gate, or opaque backing would fall outside the line.
Circle pushed for the project during FASB’s agenda consultation. President Trump’s digital asset working group also recommended in its July 2025 report that FASB consider treating payment stablecoins as cash equivalents.
How the proposal fits into broader rulemaking
FASB added the project to its technical agenda after taking it up last October, then voted in April to draft the proposal.
The effort builds on the board’s 2023 standard requiring companies to measure bitcoin and other crypto assets at fair value. That guidance explicitly excluded stablecoins and non-fungible tokens, or NFTs.
The accounting proposal is moving in parallel with a statutory framework. The GENIUS Act became law in July 2025, and the Treasury Department on Monday proposed rules on who may issue and distribute payment stablecoins.