Stablecoins: issuer and holder

What are stablecoins?

Most stablecoins by value are fiat-backed: an issuer sells tokens for dollars and holds reserves of cash and short-term government securities, promising to redeem each token for one dollar. Others are backed by crypto held as collateral, or are algorithmic, relying on mechanisms to hold their price rather than on reserves. Tokens circulate on blockchains and are traded on exchanges, so most holders buy them from others rather than from the issuer. See crypto assets and fintech accounting.

How does a stablecoin issuer account for its tokens?

An issuer that has a contractual obligation to redeem tokens for cash has a financial liability under IAS 32, because it cannot avoid delivering cash if holders ask. The liability is normally measured at amortised cost, which for tokens redeemable on demand at par is the amount redeemable. The cash received and the reserve assets bought with it are the issuer's own financial assets, classified under IFRS 9 according to how they are managed: bank deposits and Treasury bills held to collect at amortised cost, or at fair value through profit or loss if managed on a fair value basis. Fees charged on issuing or redeeming tokens are recognised when the transaction occurs. See IFRS 9 classification.

Stablecoins: an issuer's year

An issuer has US$ 1,000 million of tokens in issue throughout a year, redeemable at par. It holds reserves of 800 million in Treasury bills yielding 4% and 200 million in bank deposits earning 3%. It pays a distribution partner, an exchange holding 40% of the tokens on its platform, 50% of the reserve income attributable to those tokens, and has operating costs of 10 million.

The issuer's balance sheet shows a 1,000 million liability to token holders and 1,000 million of reserve assets. Its income is the 38 million of interest on the reserves; holders of regulated US payment stablecoins cannot be paid interest, so the issuer keeps it. The 7.6 million paid to the exchange is a distribution cost, not a reduction of revenue, because the exchange is not the issuer's customer for the reserves' interest. Profit depends heavily on interest rates: if they fell by half, so would the issuer's income, while its costs would not.

How does a holder account for stablecoins?

A holder that has an enforceable contractual right to redeem its tokens with the issuer for a fixed amount of cash holds a financial asset under IFRS 9, measured at amortised cost or fair value depending on its contractual terms and business model. Many corporate holders cannot redeem directly: issuers often redeem only for verified institutional customers, so other holders rely on selling the tokens on an exchange. A holder without a redemption right of its own, or holding an algorithmic or crypto-backed token, usually has no contractual right to cash and treats the token like other crypto, as an intangible asset under IAS 38 or inventory under IAS 2. See IFRS 9 explained.

Can stablecoins be cash equivalents?

Under IAS 7, cash equivalents are short-term, highly liquid investments readily convertible to known amounts of cash and subject to an insignificant risk of changes in value. IFRS has no specific guidance for stablecoins, and given the credit risk of issuers, the reliance on secondary markets for many holders and past episodes of tokens losing their peg, companies have generally not treated them as cash equivalents. In the US, the FASB issued a proposal in August 2026, with comments due in November 2026, to show through examples when certain stablecoins with direct redemption rights and segregated, high-quality reserves can be cash equivalents. See IAS 7 cash flows.

What about crypto-backed and algorithmic stablecoins?

For an issuer of a crypto-backed token, the analysis depends on the terms: if holders can claim the collateral, the issuer may have a liability to deliver crypto, measured by reference to the collateral. Algorithmic tokens usually carry no claim on anyone, so holders treat them as crypto assets, and the issuing protocol's accounting, if there is an entity to account at all, depends on its specific design. These tokens have a history of losing their peg, which affects impairment and disclosure.

How does US GAAP differ?

The GENIUS Act, signed in July 2025, regulates US payment stablecoins: issuers must hold reserves of at least one dollar of high-quality liquid assets for each dollar of tokens, publish monthly reserve reports and may not pay interest or yield to holders, and payment stablecoins are excluded from being securities or commodities. Stablecoins that give enforceable rights to underlying assets are outside the fair value rules of ASU 2023-08 for crypto assets, so holders account for them under other guidance. The FASB's 2026 proposal on cash equivalents would apply to holders, not issuers. See safeguarding customers' crypto. For crypto assets that are within its scope, see ASU 2023-08 crypto assets.

This guide is general information. It is not tax or legal advice for your situation.