Circle co-founder Jeremy Allaire on Friday described the U.S. Financial Accounting Standards Board’s new stablecoin accounting proposal as “an enormous strategic unlock” for assets like USDC.
The proposal, released August 18, 2026, would allow financial institutions and corporations to classify qualifying stablecoins as cash equivalents under Topic 230, the standard covering the statement of cash flows. Allaire rated the measure a nine out of 10 and linked it to the GENIUS Act, arguing that the accounting change and the legislation together could accelerate wider USDC adoption.
FASB’s draft adds guidance rather than changing the definition of a cash equivalent. To qualify, a token must be redeemable on demand directly with the issuer for a known cash amount, and the issuer must hold segregated reserves of at least one dollar in short-term, highly liquid assets per token. Secondary-market liquidity alone is not enough, and tokens backed by volatile assets such as cryptocurrencies or gold are excluded.
Public comments are open until November 19. Coinbase already adopted the approach as of December 31, 2025, telling the SEC that USDC, EURC and PYUSD are backed by segregated cash-equivalent reserves and redeemable one-to-one. Coinbase said the retrospective change did not alter previously reported assets, liabilities, equity, net income or earnings per share.
Hofstra University accounting professor Jack Castonguay expressed skepticism, saying the draft did not go farther and that allowing stablecoins to sit under cash remains too far. The November 19 comment deadline is expected to reveal how issuers, corporate treasurers and auditors view the proposal before FASB makes a final decision.
