Tempo report says FASB stablecoin proposal hinges on direct redemption rights
In brief
- Stripe-backed Tempo says a FASB proposal could remove a major barrier to corporate stablecoin adoption.
- Qualifying stablecoins could be classified as cash equivalents on corporate balance sheets.
- Direct redemption rights with the stablecoin issuer would be required, Tempo says.
- FASB's proposal is open for public comment until Nov. 19.
Why the classification matters
Under current practice, stablecoin holdings may not count toward a company's reported cash reserves, according to Cointelegraph's summary of the report. That isn't a cosmetic issue. It affects liquidity ratios and loan covenants, even when the tokens are fully dollar-backed.
Tempo argues the proposed change could let companies use stablecoins for payments and settlements without those complications, making the tokens more practical for corporate treasury operations.
Redemption rights are the catch
The proposal doesn't treat every stablecoin balance the same way. According to Tempo, it would require companies to have direct redemption rights with stablecoin issuers. Buying USDC through an exchange wouldn't necessarily let a company classify those tokens as cash equivalents.
“Your contract with the issuer is what qualifies, and the token alone doesn’t get you there,” Tempo said
Tempo pointed to Coinbase as a reference case. Coinbase classified USDC and other payment stablecoins as cash equivalents in its 2025 annual report, supported by its redemption arrangement with Circle, as cited in Tempo's report.
Holding the token by itself isn't enough.
Still a proposal, not a rule
The FASB proposal remains open for public comment until Nov. 19. The board will review that feedback before finalizing the changes and setting an effective date, so nothing's locked in yet.
It follows the GENIUS Act, passed in July 2025, which established the first comprehensive federal regulatory framework for payment stablecoins in the US. That law is scheduled to take effect in January 2027, or 120 days after federal regulators finalize implementing rules (whichever comes first). The two cover different ground: the GENIUS Act sets requirements for issuers, including reserve backing and redemption obligations, while FASB's proposal addresses how companies account for the stablecoins they hold.
The market they're shaping isn't small. US dollar-backed stablecoins have surpassed $300 billion, according to DefiLlama data. Separately, Bloomberg reported that the Trump administration is weighing partnerships with private companies on overseas stablecoin projects, potentially involving the Treasury Department, State Department and the US International Development Finance Corporation.
Frequently asked questions
What does the FASB stablecoin proposal change for companies?
According to a Tempo report cited by Cointelegraph, the proposed Accounting Standards Update could let companies classify qualifying stablecoins as cash equivalents. Under current practice, stablecoin holdings may not count toward reported cash reserves, which affects liquidity ratios and loan covenants.
Would buying USDC on an exchange count as a cash equivalent under the proposal?
Not necessarily. Tempo says the proposal would require direct redemption rights with the stablecoin issuer, and that the company's contract with the issuer, not the token alone, is what qualifies for cash-equivalent treatment.
When would the FASB stablecoin accounting changes take effect?
No effective date has been set. The proposal is open for public comment until Nov. 19, and the board will review the feedback before finalizing the changes and setting an effective date.
How is the FASB proposal different from the GENIUS Act?
The GENIUS Act, passed in July 2025, sets requirements for stablecoin issuers, including reserve backing and redemption obligations. The FASB proposal addresses how companies account for the stablecoins they hold.
