In a landmark move that could reshape how companies account for digital assets, the U.S. Securities and Exchange Commission (SEC) has issued interim guidance permitting certain U.S. dollar-backed stablecoins to be treated as cash equivalents on corporate balance sheets.
Reported by Bloomberg Tax on August 5, the update marks a significant shift in the SEC’s stance toward digital currencies and is part of a broader effort by the agency, under the leadership of SEC Chair Paul Atkins, to modernize cryptocurrency regulation. The newly issued guidance outlines strict qualifying criteria—only stablecoins that are fully backed by cash or short-term Treasury bills, maintain a consistent 1:1 peg with the U.S. dollar, and offer guaranteed redemption rights will be eligible for the favorable accounting treatment.
🚨JUST IN: SEC updates staff guidance on accounting rules for USD stablecoins: Bloomberg
This fresh new guidance suggests that stablecoins pegged to the U.S. dollar could receive cash equivalent classification, contingent on having guaranteed redemption mechanisms and value… pic.twitter.com/nfbCwpldrz
— Greg Acero (@4Acezz) August 5, 2025
By meeting these conditions, the stablecoins are considered to carry a similar risk profile to traditional cash equivalents such as money market funds. However, the policy explicitly excludes algorithmic stablecoins, yield-bearing tokens, and any digital assets not directly tied to the dollar.
The SEC’s updated stance marks a notable departure from its earlier restrictive policies, which had previously discouraged many traditional financial institutions from engaging with stablecoins due to accounting uncertainties.
This move aligns closely with recent legislative developments—particularly the July passage of the GENIUS Act, signed into law by President Trump. The Act mandates public audits and reserve requirements for regulated stablecoins, officially designating them as a distinct financial instrument—neither a security nor a commodity. As a result, major issuers like Circle (USDC) and Tether (USDT) are now navigating a more defined regulatory landscape.
Despite this progress, the SEC noted that the current guidance is temporary and will likely be followed by formal rulemaking under its ongoing “Project Crypto” initiative. The project aims to establish clearer classification standards for digital assets and enhance corporate disclosure requirements.
Market observers remain cautious, however, pointing to unresolved issues around transparency, redemption risk, and the potential misuse of stablecoins in illicit financial flows. Questions also linger regarding the treatment of complex or non-U.S. stablecoin structures.
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