By Tom Whitfield

A proposed US accounting standard could let corporations classify stablecoins as cash equivalents on their balance sheets for the first time, removing what blockchain analytics firm Tempo calls a major barrier to corporate adoption. The Financial Accounting Standards Board (FASB) opened the proposal, an Accounting Standards Update issued in August, to public comment until Nov. 19.

The problem is mechanical, not ideological. Under current accounting practice, stablecoin holdings may not count toward a company's reported cash reserves — even when the tokens are fully backed by dollars. That gap distorts liquidity ratios and can trigger loan covenant issues, according to Tempo's report, which was published with backing from Stripe. Companies that want to use stablecoins for payments and settlement have carried accounting penalties for doing so.

The FASB proposal would resolve that — but only for token holders with a specific contractual relationship.

What qualifies a stablecoin as cash?

Under the proposed update, a company must hold direct redemption rights with the stablecoin issuer to claim cash-equivalent treatment. Buying USDC through an exchange, for example, would not automatically qualify. The contract, not the token, determines the accounting outcome.

"Your contract with the issuer is what qualifies, and the token alone doesn't get you there," Tempo said in the report.

The market already has one working template. Coinbase classified USDC and other payment stablecoins as cash equivalents in its 2025 annual report, relying on its redemption arrangement with Circle. That arrangement gives Coinbase the direct issuer relationship the FASB proposal would require of other corporates.

The practical consequence: stablecoin adoption at the treasury level could concentrate among companies able to negotiate redemption agreements directly with issuers such as Circle, rather than spreading evenly across any firm that buys tokens on the open market.

How does this fit the GENIUS Act?

The FASB proposal arrives on the heels of the GENIUS Act, passed in July 2025, which established the first comprehensive federal regulatory framework for payment stablecoins in the United States. The law takes effect in January 2027, or 120 days after federal regulators finalize implementing rules — whichever comes first.

The two instruments cover different layers of the stack. The GENIUS Act sets requirements for issuers, including reserve backing and redemption obligations. The FASB update governs how companies that hold those stablecoins account for them on their books. Together they address both sides of the corporate treasury question: what issuers must guarantee, and how holders report what they own.

The Treasury Department has already proposed GENIUS Act implementing rules targeting illicit finance, signaling that the regulatory build-out is proceeding in parallel with the accounting reform.

What is the market context?

The total market for US dollar-backed stablecoins has surpassed $300 billion, according to DefiLlama data. The Trump administration is separately exploring ways to promote dollar-backed stablecoins overseas, according to Bloomberg, weighing partnerships with private companies that could involve the Treasury Department, the State Department and the US International Development Finance Corporation (DFC). The reported aim is reinforcing the US dollar's role as the dominant reserve currency.

For corporate treasurers, the FASB timeline is the operative one. Comments close Nov. 19; the board will then review feedback, finalize the standard and set an effective date. Until that date arrives, companies holding stablecoins without direct issuer redemption rights continue to account for fully backed dollar tokens outside their reported cash positions.