FASB Proposal Would Let Companies Treat Some Stablecoins as Cash Equivalents: What It Says and What It Doesn’t

Quick answer: The Financial Accounting Standards Board (FASB), the body that writes US accounting rules, has proposed guidance showing when a stablecoin can be presented as a “cash equivalent” on a company’s balance sheet. A token would need an on-demand right to redeem for cash directly with the issuer, plus issuer reserves held in segregated accounts at least one-to-one in short-term, highly liquid assets. Companies could choose to treat qualifying coins this way, but wouldn’t have to. The proposal was issued on August 18, 2026, and comments are due November 19, 2026. It surfaced again this week when JPMorgan analysts listed it among the regulatory moves that partly offset the Senate’s failure to advance the CLARITY Act. It is still only a proposal, no effective date is set, and it does not turn any stablecoin into legal cash.

Why an accounting proposal matters to crypto

Accounting rules sound dull. They aren’t, at least not for anyone who runs a corporate treasury. How a company classifies an asset decides how it shows up in the financial statements, what auditors ask about it, and whether the finance team is comfortable holding it in size.

Right now, a company holding stablecoins has to work out for itself whether they sit alongside cash and Treasury bills or are treated as something riskier. Practice has varied. FASB’s exposure draft tries to narrow that guesswork by adding illustrative examples to the existing cash-equivalents guidance (ASC 230-10), rather than rewriting the definition itself.

That distinction is easy to miss in headlines. According to the Deloitte and KPMG summaries of the proposal, FASB isn’t creating a new accounting model for digital assets or widening the list of things that qualify. It’s saying, in effect, “here is how the existing test would apply to a stablecoin that looks like this.”

The three tests a stablecoin would need to pass

The draft evaluates a token on three attributes, considered together. Summaries from Deloitte, KPMG and Crowe describe them consistently:

• An on-demand right to redeem for cash. The holder has a contractual right to turn the token back into cash whenever they ask, without significant fees or restrictions.
• Direct redemption with the issuer. The right has to run against the issuer for a known amount of cash. Selling the coin on an exchange or through a broker doesn’t count, because that depends on a counterparty and a market price rather than a contract.
• Segregated, one-to-one reserves in short-term assets. The issuer holds reserves in segregated accounts, at least equal to the units outstanding, in short-term, highly liquid assets such as cash and short-term Treasury bills.

Crowe’s summary adds a useful detail: reserves held in other crypto assets or gold would fail the third test. And over-collateralisation doesn’t disqualify a coin, since only the short-term, highly liquid slice counts toward the one-to-one requirement.

Picture a finance director at a mid-sized company that parks surplus cash in a regulated, Treasury-backed dollar stablecoin because it settles at 2 a.m. on a Sunday. Under the draft, she’d have a clearer checklist for deciding whether that balance can be reported with the rest of the company’s cash equivalents. Under the same checklist, an algorithmic coin, or one backed by volatile crypto, plainly wouldn’t make the cut.

It’s a choice, not a mandate

This is worth saying twice. According to the Deloitte summary, presenting a qualifying asset as a cash equivalent is permitted but not required, and it remains an accounting policy election. The proposal also doesn’t require companies to obtain legal opinions.

Deloitte also notes that entities should consider relevant laws, naming the GENIUS Act, when they decide. That connects to the rulemaking we covered earlier this week, when the OCC finalised its rule for stablecoin issuers it supervises. The accounting test looks at reserves and redemption rights, and the GENIUS framework is meant to put those features into law for regulated issuers. The two don’t depend on each other formally, but they point in the same direction.

The disclosure change that hits everyone

One piece of the proposal has nothing to do with crypto, and it may matter to more companies than the stablecoin examples. Every entity that presents any assets as cash equivalents would have to disclose the significant components and related amounts each year. Treasury bills, commercial paper, money market funds and stablecoins are all examples.

The draft doesn’t define “significant components” or set a threshold. Deloitte points out that this leaves entities to use judgement. That’s a fair criticism of the draft as written, and it’s the kind of thing commenters tend to push on. Expect accounting firms and corporate preparers to ask for clearer wording before a final standard emerges.

What the proposal does not do

Based on the Deloitte summary, the draft does not:

• change the Master Glossary definition of cash equivalents;
• define “stablecoin”, “segregated”, or what counts as a significant fee or restriction;
• require any company to present digital assets as cash equivalents;
• require a reconciliation of cash and cash equivalents to the balance sheet.

Those gaps are real. “Significant fees or restrictions” will be argued over, because a redemption right that exists on paper but carries a minimum size, a delay or a fee doesn’t behave like cash. If the final standard stays vague, auditors will end up setting the practical line case by case.

Timeline: where this stands

The exposure draft went out on August 18, 2026. Comments close November 19, 2026. After that, the board reviews the feedback and decides whether to finalise, change or drop the proposal. No effective date has been set, and early adoption would be allowed once it is final.

On transition, the summaries say the digital asset guidance would apply on a modified prospective basis, as of the start of the annual period in which a company adopts it. Companies would reconcile opening cash, cash equivalents and restricted cash before and after adoption. The new disclosure would apply prospectively and, per KPMG, comparative periods wouldn’t be required in the first year.

Realistically, a final standard is unlikely before next year. Treat anything faster as a guess.

Why JPMorgan brought it up this week

On October 22, The Block reported on a JPMorgan note, led by Nikolaos Panigirtzoglou, arguing that recent US regulatory moves partly offset the failure of the CLARITY Act. That bill, the broad market-structure legislation, stalled in the Senate. Baker Botts reports the chamber failed to invoke cloture on September 15, 2026, by a vote of 49 to 50, and the bill would need reintroducing in the new Congress in January 2027.

According to The Block’s account of the note, JPMorgan listed the regulator-led steps this way: an SEC “Innovation Exemption” for tokenised stocks, a CFTC look at leveraged crypto trading on regulated US platforms (early stage, and unlikely to advance before 2027), OCC national trust charters for stablecoin issuers and digital asset firms, and FASB’s proposal on stablecoins as cash equivalents. The Block reports the analysts’ caution as well: that “only legislation would make the framework more durable over the longer term,” and that the industry relies on a patchwork of regulatory actions that could be reversed within two years if a Democrat wins the White House.

A note on sourcing: the JPMorgan material comes second-hand through The Block’s reporting. We haven’t seen the bank’s original report, so treat the quotes and characterisations as The Block’s.

It’s also worth being clear that FASB isn’t a government regulator in the same sense as the SEC or OCC. It’s an independent standard-setter, and its standards gain force through the SEC and through audit practice. Lumping it in with agency actions, as the note reportedly does, is a convenient shorthand for “official bodies are making room for stablecoins,” not a claim that FASB can legalise anything.

What to watch next

• The comment letters after November 19. Big accounting firms and corporate treasurers will reveal where the draft is too vague, especially on “significant fees or restrictions.”
• Issuer disclosures. Whether issuers can publish reserve and redemption terms clearly enough for a holder’s auditor to sign off.
• The GENIUS rules. The OCC rule takes effect January 18, 2027, and reserve and redemption standards there will shape which coins can credibly meet the FASB tests.
• Congress. The Senate returns November 9, per Baker Botts, though a market-structure bill isn’t expected to move quickly.

FAQ

Does this make stablecoins legal cash?

No. It’s an accounting presentation question. It affects how a company reports a stablecoin balance in its financial statements, not what the coin is in law.

Is the proposal final?

No. It’s an exposure draft. Comments are due November 19, 2026, and FASB hasn’t set an effective date.

Would every stablecoin qualify?

Almost certainly not. The three tests, particularly direct issuer redemption and segregated one-to-one reserves in short-term assets, would exclude coins backed by other crypto or gold, and coins that can only be sold on a market.

Does it affect individual investors?

Not directly. It applies to company financial statements. Indirectly, clearer accounting treatment could make it easier for businesses to hold regulated stablecoins, which may influence how they’re used.

Who is affected by the new disclosure rule?

Any entity that presents cash equivalents, whether or not it holds crypto, would disclose the significant components and amounts annually.

Key Takeaways

• FASB proposed on August 18, 2026 to add examples showing when stablecoins can be cash equivalents. Comments are due November 19, 2026.
• A coin would need on-demand, direct issuer redemption and segregated one-to-one reserves in short-term, highly liquid assets.
• Treating a qualifying coin as a cash equivalent would be a choice, not a requirement.
• The disclosure change on “significant components” applies to all companies with cash equivalents, and the term is undefined.
• JPMorgan (as reported by The Block) sees such moves as partial offsets to the CLARITY Act setback, but says durable rules need legislation.

Sources and further reading

• Deloitte DART: FASB Proposes Enhancements to Disclosures About Cash Equivalents and Clarifications to the Evaluation of Certain Digital Assets
• Crowe: FASB proposes cash equivalents guidance for stablecoins
• KPMG: FASB issues proposed ASU on cash equivalents
• The Block: JPMorgan says crypto regulatory moves partly offset Clarity Act failure, but risks remain
• Baker Botts: CFTC Launches Crypto Market Structure Rulemaking as SEC Advances Its Own Digital Asset Framework

This article is for information only and is not financial, tax, accounting or legal advice. Rules described here are proposals and may change. Do your own research and speak to a qualified professional before acting.

Want more on how the rules around stablecoins are taking shape? Read our breakdown of the OCC’s final GENIUS Act rule and our beginner’s guide to the GENIUS Act, and subscribe to catch the next regulatory update.