Circle commends the FASB for its open and forward-looking approach to identifying key financial reporting priorities.
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Circle recently submitted a comment letter to the Financial Accounting Standards Board (FASB) in response to its 2025 Agenda Consultation. Circle commends the FASB for its open and forward-looking approach to identifying key financial reporting priorities, and we appreciate the opportunity to contribute to its standard setting agenda.
As payment stablecoins grow in utility and ubiquity and Congress advances much-needed legislation, we believe it to be especially timely and impactful for standard-setting bodies like the FASB to align the treatment of payment stablecoins with the definition of "cash equivalents" under U.S. Generally Accepted Accounting Principles (U.S. GAAP). In our comment letter, Circle encourages the FASB to revisit this definition to reflect the realities of today’s evolving digital financial ecosystem and significant use of stablecoins in commercial and institutional settlement.
Why Circle Supports Revising the Definition of Cash Equivalents
Payment stablecoins, such as USDC and EURC, play an increasingly vital role in the new digital financial system by enabling fast, secure, low-cost transactions with the reach and settlement speed of the internet. Despite their functional equivalence to cash in traditional finance, there remains ambiguity under current U.S. GAAP regarding whether stablecoins can be classified as cash equivalents. This lack of clarity places a burden on holders of payment stablecoins to interpret and justify their accounting treatment and may lead to inconsistent presentation in financial reporting at a time when payment stablecoins are being used for trillions of dollars in transactions per year.
The FASB should expand the definition of cash equivalents to include certain payment stablecoins that are designed to maintain a stable value relative to a reference fiat currency, redeemable on a one-to-one basis, and backed by low-risk and highly liquid reserves. Doing so would bring much-needed consistency, transparency, and decision-usefulness to financial statements across a growing number of retail users and financial institutions adopting stablecoins.
Why Guidance from the FASB is Urgently Needed
The need for updated guidance has never been more pressing. The U.S. Congress is moving swiftly to establish a comprehensive framework for payment stablecoins. The Guiding and Establishing National Innovation for U.S. Stablecoins Act of 2025 (GENIUS Act), which has passed the Senate with bipartisan support, provides strong legislative intent that payment stablecoins issued by permitted entities can be treated as cash equivalents, including for accounting purposes. Circle believes this regulatory momentum underscores the need for the FASB to proactively provide authoritative accounting guidance to ensure consistent accounting practice. As regulated digital currency infrastructure becomes increasingly integrated into the financial system, the absence of clear accounting guidance will only grow more problematic.
Looking Ahead
We applaud the FASB for its thoughtful consideration of the many complex and emerging issues raised in the 2025 Agenda Consultation. Circle looks forward to continued collaboration with the FASB and other standard setters to help shape accounting frameworks that will support innovation, trust, and stability in the new internet financial system.
View Circle's full response to the FASB.
