FASB proposes guidance to help stablecoins qualify as cash equivalents under US accounting rules

The Financial Accounting Standards Board, the body that sets the accounting rules every public company in America follows, has tentatively decided that certain fiat-backed stablecoins can be classified as cash equivalents under US Generally Accepted Accounting Principles. The decision, reached on April 15, doesn’t rewrite the definition of cash equivalents. It simply says: if a stablecoin walks like a cash equivalent and quacks like a cash equivalent, companies can treat it like one. Until now, companies holding stablecoins faced a classification headache. The tokens didn’t fit neatly into existing categories, which meant accountants had to improvise, and auditors had to squint. FASB’s move gives corporate treasurers a clearer path to putting stablecoins on the same line item as money market funds and short-term Treasury bills. What FASB actually decided The board chose not to create an entirely new category called “digital cash equivalents.” That option was on the table and explicitly rejected. Instead, FASB will add illustrative examples to ASC 230, the codification section that governs cash flow statements, showing how existing criteria apply to stablecoins. The existing definit...