Stablecoin as Cash: The Three Criteria to Check Your Balance Yourself

A stablecoin promises in its name what it only has to prove when things get difficult: a stable value, redeemable at any time. Until now there was no sober benchmark against which you could measure that promise. Since 18 August 2026 there is one, and it comes from a corner where nobody would have gone looking for investor protection: accounting.

The US Financial Accounting Standards Board (FASB) has published a proposal setting out when a digital asset may be carried as a cash equivalent on a corporate balance sheet at all. The proposal names three conditions, and a token has to meet all three at the same time. None of these rules applies to you as a private investor. The test behind them is nevertheless the best that is currently publicly available, because it asks the right question: who owes you your money back, how quickly, and what is it paid out of?

This article turns the three conditions into a checklist you can apply to any stablecoin balance sitting on your exchange or in your wallet right now. Where your balance is held matters too: the comparison of regulated crypto exchanges shows which providers are supervised in the EU and what obligations follow from that.

What the FASB cash equivalents proposal actually governs

The proposal is titled "Statement of Cash Flows (Topic 230): Cash Equivalents — Disclosure Enhancement and Evaluation of Certain Digital Assets" and was released for comment on 18 August 2026. The comment period runs until 19 November 2026. Only after that does the Board decide on whether it takes effect.

The trigger is unspectacular and says a great deal about the state of the industry: companies holding stablecoins told the Board they did not know how to report those holdings. The result was inconsistent practice — one company booked them as cash equivalents, another did not, and balance sheets within the same sector became incomparable.

What changes and what explicitly does not

Two things matter so that you do not overrate the proposal. First, it does not change the definition of cash equivalents at all. The Board is merely adding application examples showing how the existing definition applies to digital assets. Second, this is US GAAP. It does not apply to companies reporting under German commercial law or under IFRS.

The second part of the proposal concerns all reporting companies and has nothing to do with crypto: in future, the material components of cash equivalents are to be disclosed, meaning US Treasuries, commercial paper, money market funds or indeed stablecoins. Until now there was often just a single total. Anyone reading a balance sheet in future will therefore learn what a company's supposed cash position really consists of.

Criterion one: the contractual right to redeem on demand

The first condition requires a contractual right to convert back into money, and specifically "on demand" — on presentation, without a waiting period, without discretion on the other side. The decisive word is "contractual". A marketing promise on a product page is not a claim. A claim is set out in the terms of use, in the whitepaper or in the issuance agreement, and it is enforceable.

Reading closely, three formulations stand out that limit this right in practice without formally removing it: the issuer's option to suspend redemption; the right to change the terms at any time and without notice; and tying redemption to a prior identity check that can take weeks. None of these clauses is unusual on its own. Together they determine whether "on demand" means anything when it matters.

Criterion two: the direct redemption right against the issuer

This is the condition that sorts the field, and it is the reason the FASB proposal is of any interest to private investors. What is required is a direct right of redemption against the issuer for a known amount of money. Direct means you go to the issuer of the token and you get money. Not to an exchange, not to a broker, not to an authorised partner who in turn redeems with the issuer.

This is precisely where most large dollar tokens break, and it can be read openly in their own published terms. The user agreement for Circle Mint, the route to direct issuance and redemption of USDC, states that this service is currently open exclusively to institutions in supported jurisdictions. As a private individual you never even reach the issuer by that route.

At Tether, the Token Terms of Sale and Service in the version dated 26 February 2026 state that redemption via the website is subject to minimum amounts and further requirements, and that the redemption price per USD₮ is one unit of the reference currency, less any applicable fees under a separately maintained fee schedule. Both are the provider's own statements about its own product, not accusations from outside.

What that means for your real exit route

For you this means the way out of a stablecoin as a rule runs through the secondary market. You sell on an exchange for euros and hope the price there stays at one euro or one dollar. In calm times it does. Under stress that price is a market opinion about redeemability — not a redemption.

Criterion three: segregated reserves at one to one

The third condition requires the issuer to hold reserves separately, at least one to one against the circulating supply, invested in short-term, highly liquid assets. Three words carry the weight here, and each one can be checked against the published reserve report.

Segregated means the reserves do not sit in the general corporate assets but are held separately, so that they do not fall into the estate in an insolvency. One to one means full backing, not partial backing. And short-term and highly liquid excludes anything that cannot be turned into money within days if it comes to that.

The last point is where reports differ. At Tether, its own terms explicitly name loan receivables and other assets of affiliated companies as possible components of the reserves, and they make clear that the tokens are backed by those reserves but are not themselves cash. Whether such a composition meets the third criterion is decided, in the US framework, by the auditor of a reporting holder. What you can do yourself: open the reserve report and see what share sits in government bonds with short residual maturity and what share sits in something else.

An attestation is not an audit

One point that marketing copy regularly blurs: most reserve confirmations on the market are attestations as at a reporting date, not annual audits. An attestation confirms that certain holdings were present on a particular day. It says nothing about the day before or the day after, and it does not examine the issuer's internal controls either. How to recalculate such a confirmation yourself, and what it demonstrably does not cover, is set out step by step in the guide to proof of reserves and how to check it.

Why your exchange balance carries a second layer of risk

All three criteria concern the relationship between you and the issuer. They say nothing about the place where your balance actually sits. If your tokens are booked on a trading platform, as a rule you do not hold a token but a claim against that platform, which in turn holds tokens. One claim becomes two chains of claims, and either can break on its own.

This second layer can be switched off by transferring holdings you keep for longer into a self-custodied wallet. The chain of claims becomes shorter, but you alone carry the risk of losing access. Anyone regularly moving larger sums should know both routes and weigh them up.

MiCA and Article 49: in the EU, the redemption right is already law

What the FASB proposes as an accounting characteristic has been law in the European Union since MiCA — and in sharper form. Article 49 of the Markets in Crypto-Assets Regulation governs issuance and redeemability of e-money tokens, the category into which euro and dollar stablecoins fall in the EU.

The wording is remarkably clear. Paragraph 2 gives holders a claim against the issuer. Paragraph 3 requires issuance at the par value of the funds received. Paragraph 4 requires the issuer to redeem at any time and at par value at the holder's request. And paragraph 6 makes clear that redemption is not subject to a fee.

A holder of an e-money token authorised in the EU therefore has exactly the right that the FASB in the US is only now describing as an accounting characteristic: immediate, at any time, at par value, free of charge. Anyone who wants to check which issuers actually hold that authorisation will find the analysis of the official register in the article on the MiCA register of stablecoin issuers with all 23 authorised firms.

The practical catch in this good news

The right under Article 49 applies against the authorised issuer. It is of little help if the token you hold comes from an issuer outside the EU and is merely traded in Europe. The first question is therefore: who issues the token, and under whose supervision does that issuer stand? The product name never answers that.

The checklist for your portfolio: five questions for every stablecoin

The three conditions and the European legal framework can be turned into a list you work through in about twenty minutes per token. Two of them you only have to answer once; three are worth repeating annually.

1. Who is the issuer, and in which country is it based? The name of the token says nothing about that. The issuer is named in the whitepaper and in the terms of use.
2. Is it in the MiCA register? If so, Article 49 applies with the statutory redemption claim at par value. If not, only what has been agreed contractually applies.
3. Can you redeem directly yourself? Search the terms for the words minimum amount, institution, verified customer and fee. If you find hurdles there, your real exit is the secondary market.
4. What do the reserves consist of? Open the current reserve report and see what share sits in short-dated government bonds and what stands under the remaining items.
5. How old is the most recent confirmation, and who produced it? A confirmation older than a quarter describes a position that need no longer exist.

If the first three questions produce a clear yes, you hold something close to the concept of cash. If the answer stays no, you hold a claim against a company — which you are free to hold, but should treat differently from money in a bank account.

Where to find the evidence without clicking through marketing pages

The details that matter are rarely where a provider would like them to be. Four sources are enough for any serious check, and all four are public.

In the crypto-asset whitepaper, MiCA-regulated issuers set out the redemption terms in a clearly identifiable place; Article 49(5) requires this expressly. In the terms of use you find the clauses on minimum amounts, fees and suspension, usually under headings such as Issuance and Redemption. The reserve report names composition and reporting date, often under a Transparency menu item. And the supervisory authority's register answers the authorisation question bindingly, regardless of what the product page says.

A note on the sources for this topic

While researching this article, the FASB website refused access to automated requests and responded with error code 403. The content of the announcement could be fully confirmed through the trade press, among others CPA Practice Advisor and Accounting Today, which reproduce the title of the proposal and the three criteria verbatim. For you as a reader the site is accessible as normal; should it stick, searching for the file number of the proposal helps.

What the proposal is not: neither binding law nor a seal of approval

Three points of context, so that a useful benchmark does not turn into false certainty.

This is a proposal. Anyone can comment until 19 November 2026; after that the Board decides on the final version and the date it takes effect. Wording can still change until then.

It is US law for reporting entities, not consumer law. No issuer is obliged by this proposal to change anything about its product. The pressure it creates is indirect: a company that wants to report its holdings as cash will prefer tokens that meet the criteria.

And it is not a statement about individual products. The proposal names no product names. Anyone claiming that token A meets the criteria and token B does not has to demonstrate that against the respective contractual documents — and that changes as soon as an issuer adjusts its terms.

What this benchmark reveals about the market of the coming years

What is interesting is less the rule itself than the direction in which two large legal areas are moving independently of one another. With MiCA, the EU has written the redemption right at par value into law. The US is approaching the same question through the balance sheet and arriving at almost identical features: an immediate claim, a known amount, segregated and liquid backing.

For issuers this creates an incentive to replace the marketing term stablecoin with verifiable commitments. For you it creates something more practical: a vocabulary with which you can compare offers without depending on yield promises or size figures. A token whose issuer meets all three features and appears in the European register is a different product from one where only authorised partners may redeem — even if both show one dollar on the price display.

Checking a stablecoin: what to take away

1. First check who is allowed to redeem — you, or only an authorised partner. That single question separates a payment promise from a claim you can only realise through the market. The answer is in the issuer's terms of use. Holdings you keep for longer then belong in your own custody; which devices are suitable is shown by the hardware wallet comparison.
2. Check the MiCA register before you park larger sums in a token. Under Article 49, an authorised e-money token issuer owes you the par value at any time, free of charge. Which trading venues list such tokens and what costs arise there is shown by the crypto exchange comparison.
3. Check the reserve report and its reporting date once a quarter. Composition and coverage change, and an old confirmation describes a position that may have passed. Anyone holding balances across several platforms keeps track of them with the portfolio trackers and tax tools.

The full text of the proposal and the Board's announcement are on the FASB website. The wording of Article 49 of the Markets in Crypto-Assets Regulation is available on EUR-Lex.

(As of August 19, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)