Stripe-backed blockchain Tempo released a report arguing that a proposed US accounting change could significantly boost corporate stablecoin adoption by allowing qualifying tokens to be classified as cash equivalents. The proposal, issued by the Financial Accounting Standards Board (FASB) in August, aims to resolve current barriers where stablecoin holdings do not count toward reported cash reserves, negatively impacting liquidity ratios and loan covenants even when fully backed by dollars.
Under the FASB’s suggestion, companies would need direct redemption rights with stablecoin issuers to qualify for this classification. Tempo noted that purchasing tokens like USDC through an exchange might not suffice; instead, a contractual arrangement with the issuer is required. Coinbase serves as a precedent, having classified USDC as cash equivalents in its 2025 annual report due to its redemption agreement with Circle.
The public comment period for the proposal closes on November 19, after which the board will review feedback before finalizing changes and setting an effective date. This initiative follows the passage of the GENIUS Act in July 2025, which established the first comprehensive federal regulatory framework for payment stablecoins in the United States. While the GENIUS Act focuses on issuer requirements such as reserve backing, the FASB proposal addresses how holding companies account for these assets. These developments occur as the market for US dollar-backed stablecoins exceeds $300 billion.
The distinction between token ownership and issuer contracts highlighted in the Tempo report underscores a critical operational shift for corporate treasuries. Merely holding a stablecoin on an exchange does not guarantee balance sheet treatment as cash; the legal right to redeem directly from the issuer is the determining factor. This nuance forces corporations to scrutinize their counterparty relationships and ensure they have direct agreements with issuers like Circle or Tether, rather than relying solely on secondary market access.
From a Regulatory perspective, the alignment of FASB accounting standards with the GENIUS Act creates a more cohesive environment for institutional adoption. By addressing the accounting friction that previously deterred large-scale treasury use, regulators are effectively removing a non-legal barrier to entry. However, the requirement for direct redemption rights may disadvantage smaller firms lacking the leverage to negotiate bespoke contracts with major issuers, potentially concentrating stablecoin utility among larger enterprises with established financial infrastructure.
