Are stablecoins cash equivalents? What FASB's 2026 proposal actually says
FASB's August 2026 proposal on digital assets and cash equivalents, explained. What it changes, the three criteria that matter, and the November 19 comment deadline.
Two things happened in US accounting within a week of each other, and if your company holds stablecoins on its balance sheet, both land on your desk. On August 18, 2026, FASB issued a proposed Accounting Standards Update on digital assets and cash equivalents. On August 25, the AICPA released an updated practice aid on accounting for and auditing digital assets. One sets authoritative GAAP, the other guides practitioners. Together they're the clearest signal yet that stablecoin accounting is moving from improvised to standardised.
The headlines got the FASB proposal wrong. Plenty of coverage said "FASB makes stablecoins cash." It doesn't. Here is what the proposal actually does, and what it means for a finance team.
What FASB proposed, and what it didn't
The proposed ASU is titled "Cash Equivalents, Disclosure Enhancement and Evaluation of Certain Digital Assets." Two things to be precise about.
First, it does not reclassify stablecoins as cash equivalents, and it does not change the definition of a cash equivalent. It adds illustrative examples to help holders evaluate whether a given digital asset qualifies, and it adds a disclosure requirement. Whether a specific stablecoin counts stays a facts-and-circumstances judgment made by the holder.
Second, it amends ASC 230, the cash flow statement guidance, not ASC 350-60. ASC 350-60 is the separate rule (from ASU 2023-08) that has crypto held at fair value. This proposal is a different track: it's about whether certain fiat-redeemable digital assets can sit in the cash-and-equivalents line at all.
The three attributes that matter
The proposal points to a set of attributes for judging whether a stablecoin qualifies as a cash equivalent. In plain terms:
- An on-demand redemption right. You can convert the token to cash on demand, by contract, not just by finding a buyer.
- A direct claim on the issuer for a known amount. Redemption is with the issuer, at par in the referenced fiat, for a known amount of cash. Not "whatever the market pays today."
- Segregated reserves at 1:1 or better. The issuer holds reserve assets, kept separate, at least equal to the tokens outstanding, in short-term, highly liquid instruments.
The line that trips people up: being able to sell a stablecoin on a secondary market is not enough on its own. Deep exchange liquidity doesn't make something a cash equivalent. The holder needs a direct redemption claim on the issuer. So an algorithmic or lightly-reserved token, however liquid, is unlikely to clear the bar, while a fully-reserved, redeemable payment stablecoin has a real case.
A disclosure that hits everyone
The proposal also adds a disclosure requirement, and this part isn't limited to crypto holders. Every reporting entity would disclose the significant components and amounts of its cash equivalents, Treasury bills, commercial paper, money market funds, and, where they qualify, stablecoins. If your cash-equivalents line has always been a single number, that number is about to need a breakdown.
Comments on the proposal are due November 19, 2026. There is no effective date yet; FASB sets that when the final standard issues. If your treasury holds stablecoins in size, the comment period is the moment to weigh in, not after.
Why this matters for a balance sheet
Today, stablecoin classification is a mess. With no rule written for them, companies have reached for whatever fits: a receivable under ASC 310, an intangible under ASC 350, or fair-value crypto under ASC 350-60. Some of those pathways introduce mark-to-market movement through earnings for an asset that's supposed to hold a steady dollar value. That's a distortion, a token pegged to a dollar creating P&L volatility because of how it's shelved.
Cash-equivalent treatment removes that. It puts qualifying stablecoins next to Treasury bills and money market funds, where a dollar-pegged instrument belongs. This is the logic behind Coinbase moving to classify payment stablecoins like USDC as cash equivalents rather than financial instruments. The FASB proposal is the standard-setter catching up to a question companies were already answering on their own, inconsistently.
The AICPA piece: issuers and auditors
FASB tells a holder whether a stablecoin can sit in cash equivalents. The AICPA's updated practice aid covers the parts around that. It's nonauthoritative, but it's the working reference practitioners use, and this update touches three areas.
- Stablecoin issuer accounting. A new chapter on recognising the obligation tied to issued tokens and accounting for the reserve assets that back them. This is issuer-side, not holder-side.
- Mining revenue auditing. A new chapter with auditing considerations and example procedures for mining arrangements, including mining pool participants and data-center hosts. Note this is auditing guidance, not a new revenue-recognition rule. On recognition itself, with no crypto-specific GAAP, miners still apply judgment: block rewards and transaction fees are generally recognised at fair value on the date of receipt, with transaction fees typically inside ASC 606 and block rewards often accounted for by analogy to it.
- An auditing-standards refresh. Updated for current standards including SAS No. 148 and the quality-management revisions tied to SAS No. 146. The existence, rights, and obligations chapter, how an auditor gets comfortable that crypto assets exist and are owned, was streamlined without changing the underlying guidance, and it's where self-custody versus third-party custody testing and confirmations live.
What to do
If your company holds stablecoins in treasury: review your classification now, but don't assume "cash equivalent" is automatic. Test your holdings against the three attributes above, one token at a time. Get ready for the new components-of-cash-equivalents disclosure, which will apply whether or not you hold crypto. And if the treatment matters to your numbers, file a comment before November 19.
If you're an accounting firm with crypto clients: the updated AICPA aid is the reference for stablecoin-issuer engagements and for auditing mining revenue and custody arrangements under current standards. The existence-and-ownership chapter is the playbook for testing self-custody versus custodian holdings.
Underneath both is the same requirement: transaction-level records you can actually stand behind at audit. That's the layer Kryptos Enterprise is built for, syncing exchanges, wallets, and custodians into a reconciled ledger your finance team and auditors can work from, and pushing clean journals into the accounting stack through integrations like QuickBooks. For firms, our guide for accountants covers how that fits a practice, and if you're weighing the records side of crypto regulation more broadly, our post on MiCA record-keeping is a useful companion.
One more thing on the horizon: FASB has a separate project on accounting for transfers of crypto assets, and it tentatively decided in 2026 to expand ASC 350-60 to wrapped and receipt tokens. That's a different question from cash equivalents, but it's the same direction of travel, the standards catching up to how digital assets move.
