Stablecoin compliance could determine which issuers win institutional adoption as new US accounting and regulatory rules raise standards for redemption, reserves and risk controls, according to Aquanow CEO Phil Sham.
FASB Proposal Could Remove Treasury Friction
The Financial Accounting Standards Board issued a proposal on Aug. 18 that would clarify how the existing definition of cash equivalents applies to certain digital assets, including some stablecoins. The proposal does not classify every stablecoin as cash. Instead, it focuses on qualifying assets with characteristics such as price stability, liquid reserves, and contractual rights allowing holders to redeem directly with the issuer for cash on demand. Phil Sham said the proposal could make it easier to add eligible stablecoins to existing financial workflows.
Accounting treatment would only address one part of the institutional approval process. Banks, investment firms, and corporations would still need to consider regulatory capital rules, internal risk limits, collateral standards, and contractual obligations. This regulatory development parallels the broader stablecoin expansion seen with Revolut's MiCA-compliant EURR launch in Europe.
Redemption Rights May Matter More Than the Token
FASB's focus on direct, on-demand redemption could produce different accounting outcomes for institutions holding the same stablecoin. Stablecoins are generally fungible on-chain, but the legal rights attached to those units may depend on whether the holder bought them directly from the issuer, holds them through a custodian, or has exposure through an exchange account. An institution holding a stablecoin through an exchange may have a contractual claim against the platform rather than the issuer.
Sham said the same stablecoin could be fungible on-chain but treated differently depending on the holder's contractual rights. The proposal could therefore influence how institutional stablecoin products are structured. This structural consideration is relevant to the broader stablecoin payments landscape, as seen in Visa's stablecoin settlement pilot and the projected growth in stablecoin card spending reaching $50B by 2028.
GENIUS Act Rules Raise the Compliance Threshold
Under Treasury's proposed implementation framework, a person generally would not be permitted to issue a payment stablecoin in the US after Jan. 18, 2027, without an appropriate federal or state license. A further restriction is due to begin on July 18, 2028, when digital asset service providers generally would no longer be permitted to offer payment stablecoins to US customers unless a licensed issuer issued them.
For institutions choosing among eligible stablecoins, Sham said formal authorization will be only the starting point. Firms will examine the issuer's redemption terms, the quality and concentration of its reserves, asset segregation and independent reporting. Institutions ask three practical questions: who owes us the dollar, where is it held, and how quickly can we recover it under stress. The combined accounting and licensing requirements could direct more activity toward a limited group of issuers with established banking relationships, distribution channels, and compliance teams.
