Stablecoin compliance could decide institutional winners: Aquanow CEO

Stablecoin compliance could determine which issuers win institutional adoption as new US accounting and regulatory rules raise standards for redemption, reserves and risk controls, according to Aquanow CEO Phil Sham. Summary FASB has proposed clarifying when certain digital assets may qualify as cash equivalents. Direct redemption rights could make the same stablecoin receive different accounting treatment across holding arrangements. GENIUS Act rules will restrict the US market to licensed issuers under a phased timeline. Larger issuers may gain liquidity, although smaller stablecoins can compete through specialized uses. The Financial Accounting Standards Board issued a proposal on Aug. 18 that would clarify how the existing definition of cash equivalents applies to certain digital assets, including some stablecoins. The proposal does not classify every stablecoin as cash. Instead, it focuses on qualifying assets with characteristics such as price stability, liquid reserves, and contractual rights allowing holders to redeem directly with the issuer for cash on demand. FASB’s proposal arrived one day after the US Treasury requested public comments on rules for implementing Section...