Circle’s Jeremy Allaire calls FASB stablecoin proposal a strategic unlock for USDC

Co-founder of Circle (NYSE: CRCL), Jeremy Allaire has called the new accounting proposal from the U.S. Financial Accounting Standards Board (FASB) “an enormous strategic unlock” for stablecoins like USDC. He said this on Friday 21, August, 2026.

He claimed that the proposal makes it easier for companies to hold tokens. This came three days after the FASB’s proposal that would allow financial institutions and corporations to classify appropriate stablecoins as cash equivalents.  

Why Allaire is speaking on accounting rules

Allaire’s company, Circle, issues the USDC stablecoin, and he gave the proposal “a nine out of 10”. He linked the new policy to the GENIUS Act and said the new accounting change, coupled with the passage of the GENIUS Act, would pave the way for the wider usage of USDC.   

The euphoria is not without reason. The manner in which a company records a stablecoin on its books will determine if a treasurer touches it or not. In fact, when lenders gauge a borrower’s capacity to pay back their loan, they regard cash equivalents more than they do intangible assets. 

Thus, a token that is considered an intangible asset will carry a balance-sheet penalty while a cash-equivalent token will not. 

What FASB proposed 

On August 18, the board released its proposed Accounting Standards Update. The update contains additions to Topic 230, the standard that covers the statement of cash flows. The board chose this rather than changing the definition of a cash equivalent.

Based on Deloitte’s summary of the proposal, the definition remains unchanged. The only change would be the guidance surrounding it, and a new rule that requires every company that reports cash equivalents to disclose their major components each year, whether there are any digital assets involved or not. 

Public comments end on November 19, and FASB has made it clear it will choose a final standard and an effective date when it has reviewed the feedback. For now, nothing is settled.  

The three tests a token must clear 

FASB laid out clear criteria a stablecoin must meet before being considered a cash equivalent. 

• First of all, the holder requires an on-demand contractual right to redeem the token.
• Secondly, the redemption has to be directly with the issuer for an amount of cash that is known. 
• Lastly, the issuer has to keep segregated reserves worth a minimum of one dollar of short-term, very liquid assets for every token in circulation.

The ability to sell a token on an exchange does not matter. The FASB believes that market prices can move from the promised value under stress, thus secondary-market liquidity on its own does not pass the test. 

The FASB turned down treatment as cash when reserves possess volatile assets like cryptocurrencies or gold. This inevitably leads to the exclusion of algorithmic and overcollateralized tokens despite being tagged as stablecoins. It is optional rather than mandatory for a qualifying company to meet the conditions laid out by the FASB.

Coinbase already jumped, but not everyone is sold 

Coinbase (NASDAQ: COIN) began using a new accounting method on December 31, 2025. It told the SEC that USDC, EURC, and PYUSD are backed by segregated cash-equivalent reserves and redeemable one-to-one. 

Coinbase made the change in retrospect and stated there were no alterations to previously reported assets, liabilities, equity, net income, or earnings per share.

The proposal, naturally, has its skeptics. An accounting professor at Hofstra University, Jack Castonguay, expressed glee that the draft “didn’t go farther” and still believes that allowing stablecoins to sit under cash is a step too far.

The November 19 comment deadline is one to watch. By then, we’ll get to know how issuers, corporate treasurers and auditors feel before FASB makes a final decision. For now, the two tracks will remain separate.