Stablecoins Edge Closer to 'Cash' Status Under New FASB Proposal

FASB proposes treating some stablecoins as cash equivalents

The Financial Accounting Standards Board (FASB), the nonprofit that sets U.S. accounting rules, proposed on Tuesday that certain stablecoins can be treated as cash equivalents. The draft answers a long-running question about whether dollar-pegged tokens count the same as cash under generally accepted accounting principles (GAAP). Cash equivalents are short-term, highly liquid holdings that a company can convert to known amounts of cash. FASB said the change would place qualifying stablecoins alongside Treasuries, commercial paper, and money market funds.

The proposal adds examples without changing the definition

The board issued a draft accounting standards update, not a final rule. It would not change the existing definition of cash equivalents. Instead, it adds illustrative examples that show when a dollar-pegged token meets that definition. FASB said the current uncertainty has produced what it called diversity in practice, with companies treating similar tokens in different ways. The examples aim to improve comparability among firms that choose to present these assets as cash-like.

"The amendments in this proposed update would clarify, through illustrative examples, how the current definition of cash equivalents applies to certain digital assets", 18 August 2026. — Financial Accounting Standards Board

Qualifying stablecoins must meet strict reserve tests

Under the draft, a stablecoin can rank as a cash equivalent only if it meets set conditions. Its reserves must be liquid and disclosed each year. Those reserves must also be at least equal to the circulating tokens. Holders must be able to redeem the tokens for dollars on demand. The conditions aim to separate fully backed, redeemable tokens from riskier ones that may not hold steady reserves. FASB began building crypto-specific accounting rules in 2023, and this proposal extends that work.

New disclosures would apply to all companies holding cash equivalents

The draft also adds a disclosure rule that reaches beyond crypto. Any company reporting cash equivalents would have to list their significant components and related amounts each year. The examples given include Treasury bills, commercial paper, stablecoins, and money market funds. FASB said the step would give investors clearer information and better align U.S. rules with international accounting standards. The requirement would apply whether or not a company holds digital assets.

Stablecoins rank among the largest dollar tokens

The proposal lands as stablecoins hold a central place in crypto markets. Tether (USDT) carried a market value near $183 billion, and USDC held about $71.9 billion, at the time of publication (CoinPaprika, 19 August 2026). Both tokens traded close to their one-dollar peg. Together, the two account for the bulk of the stablecoin supply. These reserve-backed tokens are the assets FASB's examples would cover, which helps explain why the board expects wide interest in the draft.

Public comment runs until November

The proposal remains a draft. FASB opened it for public comment until 19 November 2026, a 90-day window for investors, companies, and accounting firms to respond. Richard Jones, FASB's chair, said the cash-equivalents work "will be broadly applicable" and that the board expects to "hear from a broad array of stakeholders." According to Accounting Today, the Treasury Department separately proposed rules on stablecoin issuance under the GENIUS Act on Monday, part of a wider push to set clear terms for the tokens.

Primary source: Source ↗