Editor's Note: The Financial Accounting Standards Board (FASB) has included "whether stablecoins can be considered cash equivalents" and "how to account for transfers of crypto assets" as key priorities for 2026. While these are technical accounting issues, they reflect a tug-of-war among regulation, politics, and capital markets over the legitimization of crypto assets: on one hand, the "Genius Act" is pushing stablecoins into the mainstream through institutionalization; on the other, Generally Accepted Accounting Principles (GAAP) still have many gray areas—especially regarding when assets are "derecognized" and how cross-chain and wrapped tokens are defined—leading to inconsistencies in how companies report these in their financial statements.
For investors, the real significance of this discussion is not just "whether they can be considered cash," but also risk disclosure, transparency, and comparability: as stablecoins become more like cash and more like financial products, financial statements must provide clearer boundaries.
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The Financial Accounting Standards Board (FASB) has stated that it will study two crypto-related issues in 2026: whether some crypto assets can be classified as "cash equivalents," and how to account for transfers of crypto assets. These topics will be discussed against the backdrop of the Trump administration's increased support for such investments.
Over the past few months, FASB added these two crypto projects to its agenda based on public feedback. These issues are among the first of more than 70 topics that FASB will consider adding to its agenda; some of these may eventually develop into new accounting standards.
FASB expects to decide on the取舍 (selection) of these more than 70 potential topics by the end of this summer. These topics originated from an "agenda consultation," where businesses, investors, and others could submit letters indicating which issues they want FASB to prioritize.
"Many people have invested significant time and effort to help us set our agenda," said Chairman Rich Jones. "I see 2026 as the year to turn these inputs into action and deliver on our commitments."
In October of last year, FASB added the "cash equivalents" issue to its agenda, focusing particularly on certain stablecoins—assets typically pegged to a fiat currency.
This move came three months after President Trump signed a stablecoin regulatory bill into law. The bill established a regulatory framework for stablecoins, further integrating these assets into the mainstream financial system. Jones noted that the so-called "Genius Act" did not resolve the accounting question of "what can be considered a cash equivalent." He emphasized: "Telling people what does not qualify as a cash equivalent is as important as telling them what does."
President Trump himself and his family have interests in World Liberty Financial, a crypto company; he has introduced a series of policies supporting the crypto industry and halted previous regulatory crackdowns on the sector.
In November last year, FASB voted to study how businesses account for transfers of crypto assets, including "wrapped tokens"—tokens that allow crypto assets from one blockchain to be represented and used on another chain in a "mapped" form.
This project will build on requirements FASB proposed in 2023: that businesses measure Bitcoin and other crypto assets at fair value. That rule filled a gap in U.S. Generally Accepted Accounting Principles (GAAP) but did not cover non-fungible tokens (NFTs) or certain stablecoins.
Despite the crypto-related accounting requirements proposed in 2023, some believe the specific details remain unclear.
"I still think there is a huge gap in GAAP right now on a key issue: under what circumstances should we remove crypto assets from the balance sheet, i.e., derecognize them; and under what circumstances should we not?" said Scott Ehrlich, Managing Director of accounting training and consulting firm Mind the GAAP.
Both projects follow recommendations from a working group established by President Trump to support the crypto industry, while also responding to public feedback. Jones said these recommendations echo views already held by some of FASB's stakeholders.
Jones stated that he was not under pressure to adopt the working group's recommendations.
"I'm certainly happy that they believe the way to address accounting issues is to suggest these topics for FASB to evaluate," Jones said. "They did not recommend pushing legislation to handle accounting issues, nor did they suggest having the SEC speak out to set accounting treatment."
The SEC is responsible for enforcing the accounting standards set by FASB for public companies.
The securities regulator will also closely monitor any adjustments made by FASB. "The crypto space has a host of issues," said SEC Chief Accountant Kurt Hohl at a conference earlier this month. "The difficulty is that they don't fit neatly into the existing accounting standards framework."
Lawmakers and investors have occasionally expressed concerns about FASB's standard-setting approach. Recently, the agency came under scrutiny from U.S. House Republicans: they proposed freezing its funding if FASB did not withdraw upcoming tax disclosure requirements. Under the new requirements, public companies are preparing to disclose more details about taxes paid to government departments in their 2025 annual reports.
Some observers question whether the holding of crypto assets is widespread enough to warrant a place on FASB's agenda. Only a few companies, such as Tesla, Block, and MicroStrategy, include Bitcoin on their balance sheets.
"These new crypto projects don't seem to be driven by pervasiveness or other established FASB criteria for adding projects, but more by current political priorities," said Sandy Peters, head of the financial reporting policy team at the CFA Institute, which represents investment professionals.
However, as the "Genius Act" takes effect in 2027, the newly established regulatory guardrails are expected to reduce the volatility of stablecoins, and market interest in stablecoins is anticipated to heat up. Peters noted that without more adequate risk disclosures, investors are unlikely to accept stablecoins as cash equivalents.
FASB Chairman Jones also faces a "countdown." His seven-year term is expected to end in June 2027, and the search for his successor will begin in early 2026.
Jones said that in the roughly 18 months remaining, he hopes the board can initiate and complete an accounting standard on how to distinguish between "liabilities" and "equity." This determination is highly complex for certain instruments like warrants, and both businesses and auditors find it challenging.
Jones stated that this project has not yet been formally added to the agenda but could still be completed within that timeframe, as the board could opt for "targeted improvements" rather than building a completely new model. "I very much hope to get it done before I step down," he said.
