New Stablecoin Accounting Rules Could Accelerate Corporate Adoption in the U.S.

Analyst Simon Taylor examined the potential impact of new U.S. stablecoin accounting rules on corporate finance in a research report published by Tempo.

Companies reporting under U.S. Generally Accepted Accounting Principles (US GAAP) currently take different approaches to classifying stablecoins. Some recognize them as intangible assets, while others treat them as financial instruments. Stablecoins are often excluded from cash and cash equivalents despite their convertibility into fiat currency.

This classification directly affects corporate liquidity metrics. For example, transferring $10 million from a bank account into U.S. dollar-denominated stablecoins may be recorded as the acquisition of an investment asset. As a result, reported cash balances decline by $10 million, even though the company still holds assets denominated in U.S. dollars.

This creates additional constraints when calculating liquidity ratios, complying with debt covenants, and assessing available cash reserves. Companies using stablecoins for payments must also account for each transaction separately and recognize any potential gains or losses resulting from changes in token values.

Which Stablecoins Could Qualify as Cash Equivalents?

To qualify as a cash equivalent, a stablecoin must meet 3 conditions simultaneously:

1. Redemption on demand. Holders must have a contractual right to redeem their tokens for cash at any time.
2. Direct redemption by the issuer. Tokens must be redeemable directly with the issuer at a predetermined value. The ability to sell tokens on a cryptocurrency exchange at market prices isn’t sufficient.
3. Full reserve backing. The issuer must maintain reserves of at least $1 for every token issued. These reserves must consist of cash or short-term, highly liquid assets and be held in segregated accounts.

The nature of the contractual relationship between the stablecoin holder and issuer is also critical. For example, 2 companies holding USDC tokens could receive different accounting classifications:

1. A company with a direct redemption agreement with Circle, the issuer of USDC, could potentially classify its tokens as cash equivalents.
2. A company that purchased USDC on an exchange and doesn’t have direct redemption rights with the issuer wouldn’t meet the proposed criteria.

The FASB approach also limits the ability to classify tokens backed by cryptocurrencies or gold as cash equivalents because their redemption values don’t meet the requirement for a predetermined cash amount.

Changes Will Affect Corporate Liquidity and Financial Disclosures

Adopting the proposed rules would allow companies that meet the relevant requirements to include stablecoins in their cash and cash equivalents. The changes would also simplify accounting for transfers between bank accounts and stablecoins, as well as payments to suppliers. Under the appropriate classification, these transactions wouldn’t automatically need to be treated as acquisitions or disposals of separate investment assets.

In addition to changing the accounting treatment of digital assets, FASB proposed expanding disclosure requirements for the composition of cash equivalents. Companies would be required to provide an annual breakdown of the relevant balance sheet item, identifying separate categories of instruments, including Treasury bills, commercial paper, money market funds, and stablecoins.

The new requirement would also apply to companies that don’t use stablecoins but report cash equivalents in their financial statements.

Changes Could Accelerate Corporate Stablecoin Adoption

According to a Paybis study, 13.4% of companies already use stablecoins for international settlements, while another 9.1% plan to adopt them within the next year. Meanwhile, the share of B2B payments in total stablecoin transaction volume increased from 36% in 2023 to 97.8% in 2026.

However, the benefits of stablecoin payment infrastructure haven’t eliminated accounting constraints for corporate treasury departments. The new rules could change this by allowing companies to use qualifying stablecoins for liquidity management without excluding their value from cash equivalents.

Simon Taylor believes the changes could increase CFOs’ interest in using stablecoins for international payments, settlements with digital platform partners, and cross-border payroll programs.

Final FASB Rules Have Yet to Be Approved

The U.S. Treasury’s initiative aims to implement the GENIUS Act, which establishes requirements for payment stablecoin issuers. Meanwhile, the FASB proposals define the conditions under which these assets can be recognized as cash equivalents in corporate financial statements.

No comparable new proposals have been introduced for companies reporting under International Financial Reporting Standards (IFRS). Stablecoin classification under IFRS is governed by existing IAS 7 provisions, taking into account the characteristics of each asset and the terms under which it’s held.