Research · · 25 min
FASB's Stablecoin Proposal Explained: When a Stablecoin Counts as Cash
With 
Jeremy Nau
Key takeaways
Jeremy Nau, a CPA for over ten years, co-founded The Network Firm, which he says has about 30 CPAs, engineers and professionals and serves only digital asset companies.
A recent FASB proposal clarifies when certain stablecoins can count as cash equivalents, which Nau says would let companies such as Bitcoin miners count them toward debt covenants.
Nau says the proposal requires segregated one to one reserves, direct redemption with the issuer and no significant fees, which could push issuers toward new revenue models.
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Summary
The co-founder of a crypto-only accounting firm explains what a new FASB proposal would require before stablecoins can sit on a balance sheet as cash equivalents.
Jeremy Nau, partner and co-founder of The Network Firm, has been a CPA for over ten years. On Stabledash Live he described a new FASB proposal that could let stablecoins be held as cash equivalents, and the conditions attached to it.
From skeptic to crypto auditor
Jeremy Nau says he lived through 2008, saw a 50% correction and concluded he was not a huge supporter of the current system. He moved into gold and then became a Bitcoin adopter around 2016-2017. During the 2017 bull market, his previous firm audited one of the biggest crypto exchanges in the world, and he joined that work because the firm was looking for someone who knew digital assets.
After FTX, Nau says, a "shadow operation choke point" hit accounting firms and many stopped servicing the space. He says he was one of the first CPAs to perform a proof of reserves for an exchange and a stablecoin, work that now extends to ETFs and RWAs.
“I felt familiar, but two, I felt, wow. This is obviously the future of accounting, because this is a much faster and better way to account for things.”
Jeremy NauA firm built for one sector
The Network Firm is about 30 CPAs, engineers and professionals and services only digital asset and digital asset adjacent companies, according to Nau. He warns that firms only dipping a toe into crypto are risky to work with because they will not know what to look for. He describes blockchains as "just another type of ledger" that accountants should find familiar.
What the FASB proposal requires
Nau says the FASB proposal requires reserves held one to one, segregated, and backed by a limited set of assets; under the GENIUS Act, that means bank deposits plus treasuries and money markets under three months. Holders also need a direct redemption window with the issuer. He says USDC users on Coinbase without a direct account with Circle could not classify it as a cash equivalent, though he can see platforms acting as a proxy to the issuer.
Redemption must also come without significant fees. Nau notes that whether a one, two, 3% haircut counts as significant is not defined. He expects issuers to look at AUM fees, account opening fees or ancillary services, and questions whether interest on reserves, which depends on rates, is sustainable as an entire business.
For Nau, cash equivalent status would be a large change for balance sheets and covenant-bound companies. He says it would also push issuers to rework how they handle redemptions and how they earn revenue.
The Network Firm, FASB, Coinbase, and Circle come up most.
- People
- Jeremy Nau
- Drew Rogers
- Zach Fowler
- Zach Hughes
- Companies
- The Network Firm
- FASB
- Coinbase
- Circle
- Creature of Jekyll Island
- Federal Reserve
