FASB Proposes Rules Letting Companies Count Stablecoins as Cash, Comment Period Runs to November 19

The Financial Accounting Standards Board, the private nonprofit that writes the accounting rules every US public company has to follow, released a draft rule on August 18 that would let companies classify certain stablecoins as cash equivalents on their books.

"Cash equivalent" is one of the most-watched lines on a balance sheet. Investors, lenders and auditors treat it as money you can get your hands on fast. Right now there's no clear rule saying whether a stablecoin qualifies. FASB wants to fix that.

Three Tests, Not a New Definition

FASB isn't rewriting what "cash equivalents" means. It's adding illustrative examples to Topic 230, the accounting rule governing cash flow statements, according to Accounting Today and crypto.news. The board spelled out three conditions a digital asset needs to meet.

First, the holder needs an on-demand contractual right to redeem the token for cash. Second, that redemption has to be directly with the issuer, for a known dollar amount. Third, the issuer has to hold at least one-to-one reserves, segregated, in assets that are themselves short-term and highly liquid.

FASB gave concrete examples of what fails the test, as reported by tradingview and crypto.news. A token that trades on a busy secondary market but gives the holder no direct redemption right with the issuer doesn't cut it. Neither does a stablecoin backed by a reserve mix of crypto assets and gold, because those can swing in value and the holder isn't guaranteed a known cash amount. That knocks out algorithmic stablecoins and overcollateralized crypto-backed tokens even if they market themselves using the word "stablecoin."

Even a token that clears all three tests doesn't have to be booked as a cash equivalent. Companies keep the choice, and they still have to weigh applicable laws and regulations, per the FASB text cited by tradingview.

Every Company Gets New Disclosure Rules, Not Just Crypto Firms

FASB wants every entity that reports cash equivalents on its books, digital-asset holder or not, to break out the significant components and dollar amounts making up that line item, according to Accounting Today and The Accountant. FASB Chair Richard Jones told Accounting Today that's the part with the broadest reach. "Cash equivalents would apply to all," he said, contrasting it with more specialized proposals aimed at commodity traders.

Jones also explained the underlying confusion in plain terms. "Stablecoin is kind of like private credit in the sense that whenever someone says it, you can't have a conversation until they tell you about the terms of it," he told Accounting Today. The core question is whether it's a right to cash on demand and what's actually backing that right.

Changes would apply prospectively. Companies wouldn't have to restate prior years, according to Crypto Briefing.

Coinbase Already Made the Bet

This isn't purely theoretical. Coinbase changed its own accounting treatment effective December 31, 2025, according to crypto.news, which cited the company's SEC filing. Coinbase now classifies USDC, EURC and PYUSD as cash equivalents, saying they're redeemable one-to-one and backed by segregated cash-equivalent reserves. The company applied the change retroactively but said it didn't alter previously reported net income, assets or earnings per share, just its cash flow presentation.

That's the exact kind of inconsistency FASB says it's trying to clean up. During the board's 2025 agenda consultation process, stakeholders flagged that companies were reaching different conclusions about the same basic question under identical GAAP rules, according to cfodive and Accounting Today. A July 2025 report from President Trump's Working Group on Digital Asset Markets pushed FASB to act, cfodive reported, and the board formally added the item to its technical agenda in October 2025 before making specific decisions in April 2026.

The Bigger Picture: SEC Moves While Congress Stalls

FASB's proposal landed the same day the SEC unveiled its own "Regulation Crypto Assets" plan, which would exempt certain crypto offerings from Securities Act registration, up to $5 million as a one-time exemption and $75 million per year under a second track, according to cfodive. SEC Chair Paul Atkins called it a way to give "crypto asset entrepreneurs and market participants clear pathways to raise capital."

The timing reflects broader regulatory momentum. The Senate's CLARITY Act, the comprehensive federal framework dividing crypto oversight between the SEC and CFTC, has stalled. Senate Majority Leader John Thune moved on August 8 to set up a floor vote when the Senate returns from recess, per the Epoch Times, and Senator Cynthia Lummis called the coming weeks "the last real chance we will have for years to get this right." President Trump has pushed the Senate to pass it, framing crypto leadership as a competition with China.

Not everyone's on board. Senator Elizabeth Warren has opposed the CLARITY Act, arguing Congress should focus on "kitchen-table issues" like credit card interest rate caps instead of what she calls a "pro-industry crypto bill" that risks consumers and the financial system, per her May statement cited by the Epoch Times. Writing crypto rules that are too industry-friendly could leave retail investors holding tokens that look safe on paper but aren't backed the way people assume. FASB's redemption-and-reserve tests are at least aimed at that exact risk, requiring hard contractual rights rather than just market liquidity.

Accounting columnist Francine McKenna raised a separate objection about the SEC's move specifically, telling cfodive that Atkins is "legislating by agency rulemaking" while Congress's own bill sits stalled, calling it the same kind of end-run he criticized when the prior administration used enforcement actions instead of formal rules.

FASB's comment period runs through November 19. The board hasn't set an effective date and says it won't until it reviews stakeholder feedback. Whether Congress passes the CLARITY Act first, or FASB's accounting fix lands before lawmakers act, remains an open question heading into the fall.