SEC Updates Stablecoin Accounting Rules: Some Stablecoins Classified as Cash Equivalents

The SEC has updated its staff guidance on stablecoin accounting rules, considering stablecoins pegged to the US dollar with collateralized redemption mechanisms as "cash equivalents". This guidance is part of the SEC's efforts to formulate broader cryptocurrency regulatory rules and remove restrictive measures. Chairman Paul Atkins has been leading these efforts, including a clarification in April that US dollar stablecoins are not securities and do not require registration.

The U.S. Securities and Exchange Commission (SEC) has issued new staff guidance that reclassifies certain stablecoins pegged to the U.S. dollar as "cash equivalents." This move is part of the SEC's ongoing effort to formulate broader cryptocurrency regulatory rules and remove restrictive measures, led by Chairman Paul Atkins. The guidance was first reported by Bloomberg Tax [1] and aligns with the GENIUS Act, a federal law signed into effect by President Trump in July 2025.

Under the new guidance, stablecoins that meet specific criteria can be classified as cash equivalents. These tokens must have a guaranteed redemption right and be fully backed by cash or Treasury bills. This classification simplifies financial reporting for firms holding compliant stablecoins and provides greater clarity for financial institutions seeking to integrate them into their operations [2].

The SEC’s guidance is temporary and is part of its ongoing "Project Crypto" initiative, which aims to clarify digital asset classification and improve disclosure standards. The new classification is seen as a meaningful step toward formal recognition of digital dollars in U.S. financial reporting, potentially accelerating the adoption of stablecoins in mainstream finance [3].

The regulatory shift is closely aligned with the recently enacted GENIUS Act, which mandates that payment stablecoins be issued only by entities approved by federal or compliant state regulators and establishes a framework for transparent and controlled issuance [4]. Together, the SEC’s guidance and the GENIUS Act create a more cohesive regulatory environment, potentially boosting market confidence and encouraging further innovation and investment in the stablecoin market.

Key stablecoin issuers such as Circle (USDC) and Tether (USDT) have not yet made public statements on the new classification. However, analysts suggest that the updated framework could drive growth in the stablecoin market while maintaining investor protections and financial stability. The SEC’s approach under Chairman Paul Atkins reflects a broader strategy to accommodate crypto assets within the existing financial infrastructure.

The guidance is expected to simplify balance sheet management for firms holding compliant stablecoins and provide greater clarity for financial institutions seeking to integrate them into their operations. The regulatory shift is also closely aligned with the recently enacted GENIUS Act, the first federal law to regulate stablecoin issuance.

The developments in Hong Kong are being closely watched by investors and industry participants worldwide. The region’s ability to balance innovation with risk management will be key to its long-term success in attracting stablecoin-related activities. As the market matures, Hong Kong’s role in the global digital asset ecosystem is likely to expand, especially as other jurisdictions refine their regulatory approaches [5].

References:
[1] https://news.bloombergtax.com/daily-tax-report-state/crypto-friendly-sec-offers-stopgap-stablecoin-accounting-clarity
[2] https://crypto.news/sec-treat-stablecoins-cash-equivalents-2025/
[3] https://www.ainvest.com/news/sec-classifies-fully-reserved-stablecoins-cash-equivalents-2508/
[4] https://www.ainvest.com/news/hong-kong-fintechs-raise-1-5-billion-stablecoin-rules-drive-expansion-2508/
[5] https://www.techinasia.com/news/hk-firms-raise-1-5b-to-fund-crypto-expansion