US accounting overhaul could make stablecoins more attractive to corporations: Tempo
A Tempo report examines how proposed US accounting rules could change corporate stablecoin holdings, with direct redemption rights determining which tokens qualify as cash.
A new report from Stripe-backed blockchain Tempo argues that a proposed US accounting change could remove a major barrier to corporate stablecoin adoption by allowing qualifying tokens to be classified as cash equivalents on company balance sheets.
The report examines an Accounting Standards Update the Financial Accounting Standards Board (FASB) proposed in August that could make stablecoins more practical for corporate treasury operations. Under current accounting practices, stablecoin holdings may not count toward a company’s reported cash reserves, affecting liquidity ratios and loan covenants even when the tokens are fully backed by dollars.
The proposed change could let companies use stablecoins for payments and settlements without those accounting complications.