・7 min read・Crypto
The stablecoin accounting trap waiting for your next audit
The SEC changed the rules on stablecoins last week. Broker-dealers can now hold payment stablecoins with a 2% capital haircut, down from 100%.
Your controller asks for guidance on how to classify your USDC holdings. You call your auditor. They say they're waiting on FASB. You call outside counsel. They say the legal framework is still being implemented. You call FASB - and that's where the loop closes. The guidance is partly contingent on legal clarity that doesn't exist yet.
This is not a hypothetical. This is the actual situation for most enterprise finance teams holding stablecoins right now. And in our work with enterprise finance teams, the most common gap we see isn't the stablecoin selection - it's the redemption documentation. Companies are holding positions they can't yet defend at audit. The regulatory floor just shifted, which means the clock on that gap is ticking faster.
"Payment stablecoin" is now a legal term
The GENIUS Act, now in implementation phase, created something that didn't formally exist before: a legal designation for payment stablecoins, not just a descriptive category. Under the act, a qualifying payment stablecoin is issued by a permitted entity, denominated in USD, designed for payment or settlement use, and backed one-to-one by high-quality liquid assets: U.S. currency, short-term Treasuries under 90 days, or central bank reserves.
The clearest candidates under the current framework are USDC (Circle) and PYUSD (Paxos/PayPal), both issued by US-regulated entities with transparent reserves. Tether (USDT) is a different story - it's issued by a non-US entity operating outside the permitted issuer structure the GENIUS Act requires, which creates a defensibility problem regardless of its market dominance. Algorithmic stablecoins and crypto-backed variants fall outside the category entirely.
The practical implication: identify which stablecoins you're holding and map them to the permitted issuer requirement before assuming they qualify for favorable treatment. USDC is a reasonable starting point for a defensible analysis. Others require more scrutiny, and the issuer's compliance attestations under the new framework will matter more than their marketing materials.
Under the updated SEC guidance, broker-dealers moved to a 2% capital haircut on payment stablecoins, down from 100%. A 100% haircut is a regulatory signal that an asset is too risky to trust on a balance sheet. A 2% haircut puts payment stablecoins in the same neighborhood as government securities. For CFOs who have been holding stablecoins cautiously or avoiding them for treasury purposes entirely, the risk premium that justified that caution got a lot smaller. But the accounting question that actually matters right now is whether you can support the position you take.
Why "segregated" and "recoverable" are not the same thing
Most commentary on the GENIUS Act focuses on stablecoin issuers' audit frequency and disclosure standards. Those matter, but they're execution problems that will get resolved. The more fundamental gap is the lack of certainty about redemption, and it's underappreciated in almost every piece written about this.
FASB's standard for cash-equivalent treatment requires that an asset be readily convertible to a known amount of cash with an insignificant risk of change in value. Audit frequency tells you whether the reserves exist. Redemption certainty tells you whether you can get your dollar back at par on demand, without friction, if something goes wrong with the issuer.
The GENIUS Act requires reserve segregation, which is meaningful protection. But "segregated" and "recoverable by you specifically at par within a reasonable time frame in an insolvency scenario" are four distinct legal concepts the current framework treats as roughly equivalent. They are not. The questions your general counsel will be asking: Does your company have direct enforceable claims against those segregated reserves in a Chapter 11 scenario? What's your claim priority relative to other creditors? Can redemptions be gated or delayed? None of that has been litigated. There's no case law. No regulatory guidance walks through the recovery waterfall for a corporate holder specifically.
A circular dependency no one warned you about
Finance teams are stuck in a loop. They're waiting on FASB for definitive guidance on cash equivalent treatment. FASB is partly waiting for the legal framework to clarify redemption mechanics. The legal framework is still being implemented. Finance teams are asking questions their advisors can't fully answer yet, and the questions keep circling back to the start.
The companies navigating this well aren't waiting for permission. They're building the classification argument now, under ASC 230, documenting a supported position before the guidance arrives rather than after. That means treating this as an accounting policy decision: write the memo that supports your classification, walk through the "readily convertible to known amount of cash" criteria, document the specific stablecoin's redemption terms, reserve composition, issuer regulatory status, and your legal counsel's assessment of redemption enforceability. The goal isn't to guess. It's to make a supported judgment call documented thoroughly enough that your auditor can follow the logic.
Consider a mid-market company holding $5M in USDC for treasury operations. The accounting question isn't whether USDC is stable - it's whether the company can produce a memo, by audit time, that walks through the ASC 230 criteria, addresses redemption enforceability, and documents the issuer's regulatory status under the GENIUS Act framework. Most companies in that position haven't started that memo. The ones that have are in a materially better position.
Two variables determine your timing
The honest answer to when to take a position comes down to two things: which stablecoin you're holding and who your auditor is.
On the stablecoin side, the argument is more defensible for USDC or PYUSD - regulated issuers with transparent reserves and a reliable redemption track record - than for anything with less regulatory clarity. On the auditor side, the Big Four are not aligned on this yet. Some teams are open to a well-documented cash equivalent position; others are asking for extensive policy memos before they'll engage; others are declining to opine at all. That variance is real and consequential right now.
The practical move is to have the auditor conversation before you take the position, not after. If your audit team is willing to engage with a well-documented judgment call, you have a path forward. If not, you'll end up restating or disclosing a disagreement - a worse outcome than a conservative classification from the start.
The one document you cannot build yourself
If you're doing the documentation work, one data point cannot be assembled from public sources: the issuer's legal opinion on corporate holder redemption rights in an insolvency scenario.
Reserve attestations confirm the assets exist. Regulatory status confirms the issuer is operating lawfully. Your own analysis confirms the stablecoin meets the technical criteria. But none of that answers the question your auditor will ultimately ask: what is the specific legal mechanism by which your company recovers its money if something goes wrong, and is that mechanism reliable enough to support "insignificant risk of value change"?
Most major issuers haven't published a sufficiently detailed legal analysis of insolvency scenarios for corporate holders specifically. That opinion - and understanding what it actually says about your claim priority and recovery process - is the work that separates a defensible position from one that gets unwound at audit. The firms that have navigated this successfully have engaged issuers directly through their legal counsel and treated it as a vendor due diligence step, not an afterthought.
Once you've secured that opinion, the rest of the documentation work is an execution problem. And execution problems are solvable. Transaction classification, chart of accounts mapping, audit trail generation - this is where the right infrastructure pays off. The manual spreadsheet approach breaks down fast when you're holding multiple stablecoin types across multiple wallets and need to produce a defensible audit trail. A crypto subledger purpose-built for enterprise accounting turns a multi-week documentation project into a repeatable process. That's the infrastructure question sitting underneath the accounting policy question.
Where to start
The teams getting ahead of this share one trait: they've stopped waiting for the framework to finalize and started building the record now. That means identifying which stablecoins you hold and whether they qualify under the GENIUS Act definition, scheduling the auditor conversation before you take any position, requesting the issuer's legal opinion on corporate holder redemption rights if you don't already have it, and starting the ASC 230 memo today, even without finalized FASB guidance.
The regulatory floor shifted. The window to build a documented position proactively, rather than defend an undocumented one at audit, is open right now. The teams that act on that aren't guessing - they're just further ahead when the auditor asks the question.