The FASB said secondary-market liquidity alone would not be enough, with holders needing direct issuer redemption rights and one-to-one liquid reserves.
The Financial Accounting Standards Board (FASB) has proposed guidance outlining when companies may classify certain stablecoins as cash equivalents under generally accepted accounting principles in the United States.
On Tuesday, the FASB said the proposed Accounting Standards Update would add illustrative examples to the current definition, addressing inconsistent treatment of digital assets such as stablecoins. The definition itself would remain unchanged.
The proposal says a qualifying digital asset would need an on-demand contractual redemption right, a direct redemption right with its issuer for a known cash amount and at least one-to-one segregated reserves held in short-term, highly liquid assets.
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