US Accounting Board Proposes Rules to Treat Some Stablecoins as Cash

The U.S. Financial Accounting Standards Board (FASB) has issued a proposed update that could let companies classify certain stablecoins as cash equivalents, according to reporting from BitKE.

The board said its aim is to clarify whether certain digital assets fit the existing definition of cash equivalents, to reduce differences in how companies apply the rules in practice, and to increase transparency around the components of cash equivalents.

Under the proposal, a stablecoin would need to meet three conditions to qualify. Holders must have a contractual right to redeem the token for cash on demand, redemption must be available directly from the issuer for a known amount, and the issuer must hold segregated reserves covering at least 100% of outstanding tokens in short-term, highly liquid assets.