The Financial Accounting Standards Board decided on April 15 that certain fiat-backed stablecoins can be classified as cash equivalents under US GAAP. This decision does not create a new accounting category but adds illustrative examples to codification ASC 230. Companies will now be required to disclose annually the total amount and breakdown by class of their cash equivalents, including the proportion held in stablecoins. Only fully backed and par-redeemable stablecoins will meet the criteria, effectively excluding algorithmic or partially-backed tokens. For issuers like Circle and Tether, this classification represents a direct commercial advantage as their tokens become balance-sheet friendly.
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