US accounting standard-setters are weighing changes that would determine when stablecoin tokens can be treated as cash on corporate balance sheets — a shift that could make the digital assets far more appealing to finance chiefs. A Tempo report published this week outlines how the proposed rules hinge on whether a token carries a direct redemption right, meaning the holder can swap it for fiat currency at par with the issuer.
That single condition would decide which stablecoins qualify for cash-equivalent treatment under US generally accepted accounting principles. Tokens without such a right would fall into a different bucket, likely requiring fair-value accounting and exposing earnings to crypto-market swings.
Why redemption rights are the dividing line
The Financial Accounting Standards Board, which sets US GAAP, hasn't finalized the rules. But the direction is clear: if a company can demand redemption directly from the issuer — without relying on a secondary market — the token behaves enough like cash to be measured that way.
That distinction matters for any business holding stablecoins as part of treasury operations. Under current practice, most crypto assets sit at fair value, meaning quarterly earnings can lurch when token prices move. A stablecoin that always trades at $1 doesn't create that noise, but only if the accounting rules let companies say so.
The proposed approach would let firms avoid marking qualifying stablecoins up or down each period. Instead, they'd carry them at face value, the same way they treat money-market funds or bank deposits.
What changes for corporate treasuries
Corporations have dipped into stablecoins for cross-border payments, short-term yield, and as a bridge between fiat and other digital assets. But the accounting treatment has been a sticking point. Finance teams don't like assets that force earnings volatility without a clear operational need.
If the rules land as proposed, a treasurer could park idle cash in a compliant stablecoin and report it alongside traditional cash equivalents. That could open the door to larger allocations, especially for companies already experimenting with blockchain-based settlement.
The catch is that not every stablecoin would qualify. Tokens issued by offshore entities, or those that only promise redemption through a marketplace, would likely miss the cut. The same goes for algorithmic stablecoins that rely on code and collateral rather than a direct claim on the issuer.
The stablecoin market's two-tier future
A split is already visible. Circle's USD Coin and Tether's USDT dominate trading, but their redemption mechanics differ. Circle advertises direct redemption for institutions. Tether has faced questions about the composition of its reserves, though it processes redemptions for large clients.
Smaller issuers that can't offer direct redemption would face a disadvantage under the proposed rules. Their tokens might still trade at a dollar, but corporate accountants wouldn't be able to call them cash. That could push treasury departments toward a handful of large, compliant issuers — or toward bank-issued deposit tokens, which already have a clearer path to cash-equivalent status.
The comment period for the proposal is open, and the board hasn't set a date for a final vote. Until then, companies weighing stablecoin holdings are stuck guessing which tokens will make the cut.
What to watch before the rules take effect
The proposal's fate rests on how the board defines "direct redemption right." If it's narrow — requiring a contractual claim on the issuer with no intermediaries — many tokens will fail. If it's broad enough to include redemption through a regulated broker, more could qualify.
Corporations won't wait forever. Treasury teams are already building stablecoin strategies for 2025, and they need accounting clarity to size those positions. A final standard could arrive next year, but the board has other projects in the queue.
For now, the practical advice from accounting firms is to keep stablecoin holdings small enough that fair-value swings don't distort earnings. That won't change until the rulebook does.
