Editor's Note: The U.S. Financial Accounting Standards Board has included "whether stablecoins can be considered cash equivalents" and "how to account for crypto asset transfers" in its 2026 work priorities. While these may seem like technical accounting issues, they reflect a tug-of-war between regulators, politicians, and capital markets over the legitimization of crypto assets. On one hand, there is the institutionalization process of the Genius Act pushing stablecoins into the mainstream; on the other hand, GAAP still has many gray areas—especially regarding when assets are "derecognized" and how cross-chain and wrapped tokens are defined, leading to inconsistent reporting practices in corporate financial statements.
For investors, the real significance of this discussion is not just "whether it can be considered cash," but rather risk disclosure, transparency, and comparability: as stablecoins become more like cash and financial products, financial statements must provide clearer boundaries.
The following is the original text:
FASB will study the accounting treatment of crypto assets.
The Financial Accounting Standards Board (FASB) stated that it will study two crypto-related issues in 2026: whether certain crypto assets can be classified as "cash equivalents," and how to account for transfers of crypto assets. These issues will be included in the discussion given the Trump administration's increased support for such investments.
Over the past few months, the FASB has added the two aforementioned encryption projects to its agenda based on public feedback. These issues are among the earliest of more than 70 topics that the FASB will consider including in its agenda; some of these topics may evolve into new accounting standards in the future.
The FASB stated that it expects to decide on the more than 70 potential issues by the end of this summer. These issues originated from an "agenda consultation," in which companies, investors, and others could submit letters indicating which matters they would like the FASB to prioritize.
“Many people have invested a great deal of time and effort in helping us develop our work agenda,” said Chairman Rich Jones. “I see 2026 as the year to translate those insights into action and deliver on our commitments.”
Can stablecoins be considered cash equivalents?
Last October, the FASB included the issue of "cash equivalents" on its agenda, focusing on certain stablecoins—assets that are typically pegged to some form of fiat currency.
This move comes three months after President Trump signed a stablecoin regulatory bill into law. The bill establishes a regulatory framework for stablecoins, bringing these assets further into the mainstream financial system. Jones stated that the bill, known as the Genius Act, does not address the accounting question of "what qualifies as a cash equivalent." He also emphasized, "Telling people what doesn't meet the criteria for a cash equivalent is just as important as telling them what does."
President Trump and his family have a vested interest in World Liberty Financial, a crypto company; he introduced a series of policies to support the crypto industry and halted previous regulatory crackdowns on the sector.
Accounting treatment for the transfer of crypto assets
Last November, the FASB voted to study how companies should account for the transfer of crypto assets, including "wrapped tokens"—tokens that allow crypto assets on one blockchain to be represented and used on another blockchain in a "mapped" form.
The project will build on a requirement put forward by the FASB in 2023: that companies use fair value measurement when accounting for Bitcoin and other crypto assets. That rule filled a gap in U.S. Generally Accepted Accounting Principles (GAAP) but did not cover non-fungible tokens (NFTs) and certain stablecoins.
Although accounting requirements related to crypto were proposed in 2023, some still believe that the specific details are unclear.
Scott Ehrlich, managing director of Mind the GAAP accounting training and consulting firm, said: "I still believe that there is a huge gap in GAAP on a key issue: under what circumstances should we remove crypto assets from the balance sheet, that is, derecognize them; and under what circumstances should we not do so?"
FASB Independence and Political Influence
Both projects follow recommendations from a task force established by President Trump to support the crypto industry, while also responding to public feedback. Jones stated that these recommendations echo views already held by some FASB stakeholders.
Jones said he was not pressured to adopt the working group’s recommendations.
"I'm certainly pleased that they believe the way to address accounting issues is to have these recommendations evaluated by the FASB," Jones said. "They didn't recommend pushing for legislation to address accounting issues, nor did they suggest having the SEC issue statements to set the tone for accounting practices."
The SEC is responsible for enforcing the accounting standards set by the FASB for publicly traded companies.
The securities regulator will also be closely monitoring any adjustments made by the FASB. "There are a lot of issues in the crypto space," said Kurt Hohl, the SEC's chief accountant, at a conference earlier this month. "The difficulty is that they don't fit neatly into the existing accounting framework."
Controversy over accounting standards for crypto assets
Lawmakers and investors have occasionally expressed concerns about the FASB's standard-setting methods. Recently, the agency came under scrutiny from House Republicans, who proposed freezing its funding if it did not withdraw its upcoming tax disclosure requirements. Under the new requirements, publicly traded companies are preparing to disclose more details about their income tax payments to government agencies in their 2025 annual reports.
Some observers question whether holding crypto assets has become widespread enough to warrant a mention on the FASB's agenda. Only a minority of companies, such as Tesla, Block.com, and Strategy.com, have Bitcoin on their balance sheets.
"These new crypto projects don't seem to be driven by popularity or other FASB-established approval criteria, but rather by current political priorities," said Sandy Peters, head of the financial reporting policy team at the CFA Institute, which represents investment professionals.
However, with the Genius Act taking effect in 2027, the newly established regulatory safeguards are expected to reduce the volatility of stablecoins, and market interest in stablecoins is anticipated to increase. Peters stated, however, that without more adequate risk disclosure, investors are unlikely to accept stablecoins as a cash equivalent.
The countdown to the FASB Chairman's term and future plans
As chairman of the FASB, Jones also faces a "time-limit." His seven-year term is expected to end in June 2027, and the selection of his successor will begin in early 2026.
Jones said that in the remaining 18 months or so, he hopes the committee can initiate and finalize an accounting standard on how to distinguish between "liabilities" and "equity." This distinction is very complex with certain instruments such as warrants, and is considered very difficult by both companies and auditing firms.
Jones stated that the project has not yet been formally included in the agenda, but it is still expected to be completed within the aforementioned timeframe because the committee can choose to make "targeted improvements" rather than building a completely new model. "I very much hope to finish it before I leave office," he said.
