FASB sets 3 tests for stablecoins to qualify as cash

The Financial Accounting Standards Board (FASB) proposed new U.S. accounting guidance on Aug. 18 that would clarify when companies may present certain stablecoins as cash equivalents. Summary FASB proposes allowing qualifying stablecoins to be presented as cash equivalents without changing GAAP’s definition. Qualifying tokens require issuer redemption rights and segregated reserves holding highly liquid short term assets. Secondary market liquidity alone cannot qualify a token when holders lack direct contractual redemption rights. All entities would disclose major cash equivalent components, whether digital assets are involved or not. Public comments remain open until November 19, with FASB setting the effective date after review. The proposed Accounting Standards Update would add examples to Topic 230, Statement of Cash Flows. It would not change the existing definition of cash equivalents under U.S. generally accepted accounting principles. FASB opened the proposal for public comment through Nov. 19. The board will decide whether to issue a final standard and set its effective date after reviewing responses. JUST IN: 🏛 U.S. accounting-standards body proposes classifying stableco...