Accounting for Stablecoins: Key Considerations to Evaluate

Stablecoins have moved from the periphery of crypto to the centre of digital finance. New rules in the US, the EU and across Asia are accelerating real-world use — and putting accountants and tax professionals in the hot seat. This article gives you a practical, standards-aware playbook for getting the accounting right.

1) What exactly is a “stablecoin”? 

Generally, stablecoins differ from a typical crypto asset in that they include mechanisms designed to minimise price volatility. Stablecoins link their values (also “peg”) to the value of traditional asset, such as a fiat currency or a commodity. Given the differences in the underlying rights and obligations, the proper accounting for a stablecoin investment will depend on facts and circumstances of that token.

Despite their design to combat volatility, it’s essential to note that stablecoins cannot legally be equated with fiat currencies. In reality, for fiat pegged stablecoins, its value fluctuates slightly, rarely maintaining a perfect 1:1 peg at every moment. 

2) Types, features, and examples

A. Fiat-referenced, fully backed (“fiat-backed”)

• What it is: Tokens designed to maintain a 1:1 value to a single fiat currency (e.g., USD, EUR), backed by high-quality reserves (cash, T-bills, bank deposits).
• Regulatory labels:
  • EU MiCA: E-money tokens (EMTs) — must offer par-value redemption and meet authorisation, reserve, governance and disclosure requirements. Rules have applied since June 30, 2024.
  • US (2025): Payment stablecoins under the GENIUS Act (federal framework enacted July 18, 2025), limiting issuance to permitted issuers and setting oversight by banking regulators/OCC.
• Examples: USDC, PYUSD, EURC.

B. Asset-referenced (basket-backed)

• What it is: Tokens seeking stability by referencing a basket of assets (fiat, commodities, other crypto).
• Regulatory labels:
  • EU MiCA: Asset-referenced tokens (ARTs) — reserve, authorisation and disclosure rules applied from June 30, 2024; “significant” ARTs face extra prudential/liquidity requirements. 
• Examples: Crypto- and commodity-backed designs; DAI (over-collateralised by crypto) is a well-known crypto-backed USD tracker.

C. Algorithmic (unbacked or partially backed)

• What it is: Peg relies on algorithms/market incentives rather than fully matched reserves.
• Regulatory stance: EU MiCA effectively excludes/bans such tokens from the ART/EMT categories because they lack explicit reserves.

3) Things to consider when evaluating a stablecoin

Why do these categories matter? Accounting for them hinges on the rights the token gives the holder (e.g., legally enforceable redemption vs. no claim) and on the regulatory wrapper around the issuer. Some useful questions to ask are the following:

• What is the purpose of the stablecoin, and how does it achieve that purpose? 
• What are the rights and obligations of the stablecoin holder? For example, is the stablecoin collateralized? If so, what are the eligible forms of collateral? Can the stablecoin be traded with parties other than the issuing entity? 
• Who is the issuing entity or group of entities that is pooling resources to support the stablecoin? 
• Does a legal entity that issues the stablecoin exist? If so, does the stablecoin convey to the holder an interest in the issuing entity? 
• What is the legal form of the stablecoin (for example, is it debt or equity)? 
• What mechanisms exist to minimize the price volatility? For example, can the stablecoin be redeemed for, exchanged for, or converted into its underlying asset? How do these mechanisms work, and how are the mechanisms governed? 
• If it is redeemable, what is the redemption frequency? 
• If it is collateralized, how is the collateral verified and to what extent is it (partially, fully, or over-collateralized)? 
• How well do the mechanisms to minimize the price volatility work? For example, how volatile is the price of the stablecoin versus its intended peg? 
• Do any credit or liquidity concerns exist? 
• What laws and regulations apply to the stablecoin?

4) What accounting and tax professionals should know 

• Regulation is now real.
  • EU MiCA rules for ARTs/EMTs started June 30, 2024; CASP licensing phases followed in late 2024/2025.
  • US GENIUS Act (2025) created the first federal regime for payment stablecoins, with issuance restricted to permitted entities and pre-empting securities/commodities treatment for compliant tokens.
  • UK is consulting on FCA rules for qualifying fiat-backed stablecoins used for payments (CP25/14, May–July 2025) and a BoE systemic regime will follow.
  • HK licensing regime in force Aug 2025.
• US GAAP changed for many crypto assets, but stablecoins are nuanced.
  FASB ASU 2023-08 (effective FYs beginning Dec 15, 2024) puts many crypto intangible assets at fair value through net income — but stablecoins may be outside its scope if they confer enforceable redemption rights (i.e., they may be financial assets instead). 
• IFRS has no new stablecoin-specific standard.
  The IFRS IC’s 2019 agenda decision addressed cryptocurrencies without contractual claims (typically IAS 38 or IAS 2). Fiat-redeemable stablecoins can meet IFRS 9’s definition of a financial asset and be measured under IFRS 9 depending on business model/SPPI. 
• Tax reporting is tightening globally
  • US IRS continues to treat virtual currency (including stablecoins) as property; transactions are taxable events.
  • OECD CARF and EU DAC8 will require cross-border crypto reporting (applicable from Jan 1, 2026 in the EU).
  • UK HMRC guidance covers cryptoassets for individuals and businesses (updated 2025). 

5) Accounting methodologies for stablecoins under IFRS (holders & issuers)

A. Holders — decision path

Step 1 — Identify the right:

• Enforceable redemption claim on the issuer for cash at par (on demand or nearly so)?
  • Likely IFRS 9 financial asset. Classification depends on business model and SPPI assessment. Treasury-type holdings to meet short-term obligations may qualify for amortised cost; trading/treasury arbitrage often drives FVPL.
• No contractual claim (e.g., algorithmic):
  • Typically IAS 38 intangible (cost model with impairment; revaluation allowed only with an active market), or IAS 2 for broker-traders (FV less costs to sell).

Step 2 — Cash/cash equivalent presentation?

• Under IAS 7, cash equivalents must be short-term, highly liquid, readily convertible to known amounts of cash and subject to insignificant risk of changes in value. A top-tier fiat-redeemable stablecoin might qualify in very narrow facts (e.g., guaranteed redemption, intraday convertibility, negligible de-peg risk). Many firms still avoid presenting as cash equivalents due to residual risk/judgement.

Step 3 — Foreign currency and P&L mechanics

• For non-USD functional currency entities holding USD-pegged stablecoins that are IFRS 9 financial assets, FX movements typically hit profit or loss (unless hedge-accounted). (Standards: IFRS 9/IAS 21)

Step 4 — Disclosures and fair value

• IFRS 13 applies for fair-value measurements;

B. Issuers — high-level accounting model

• EU EMT issuers (MiCA): tokens represent e-money liabilities with par-value redemption. Under IFRS, this is a financial liability (IFRS 9), usually at amortised cost. Reserve assets are recognised separately (often cash/financial assets at amortised cost/FV).

6) IFRS guidance (or absence of it)

• IFRS: No dedicated stablecoin standard. The IFRS IC 2019 agenda decision covers cryptocurrencies without claims (IAS 38/IAS 2). Fiat-redeemable stablecoins can be financial assets under IFRS 9, so classification hinges on contractual terms and business model. IAS 7 governs cash/cash-equivalent presentation.
• EU Prudential overlay: EBA/ESMA Level 2 measures specify reserve liquidity, “significant” criteria, and the interplay with payment services (PSD2/PSR/PSD3). Issuers and CASPs should track EBA no-action letters and RTS/ITS updates.
• UK: Regime in flight: FCA CP25/14 for qualifying fiat-backed stablecoins and upcoming BoE systemic rules.

7) Challenges the profession must navigate

1. Scope & classification judgements
   • A stablecoin with par redemption rights can be a financial asset; an algorithmic token might be intangible.
2. Audit evidence & controls
   • Existence/rights (on-chain vs. custodian statements), reserve verification, and wallet control are non-trivial. Weaknesses have been flagged by Overside Boards in crypto-related audit procedures. Expect proof-of-reserves vs. financial statement audits debates to persist.
3. Regulatory fragmentation
   • EU MiCA is live; US has a federal regime (GENIUS Act); UK is mid-consultation; Asia is licensing. Multinationals must determine jurisdiction-by-jurisdiction treatments and disclosures.
4. Liquidity & de-peg risk
   • Even high-quality fiat-backed tokens carry issuer/operational and market risks; this can undercut “cash equivalent” assertions. BIS and ECB research signal macro linkages to safe-asset markets and policy.

8) Practical application — putting it all together

Scenario A (IFRS holder): A European retailer keeps EUR-redeemable EMTs to pay suppliers within days. Legal terms guarantee on-demand par redemption, tokens are authorised under MiCA, and treasury policy prohibits lending/yield. Likely IFRS 9 financial asset; amortised cost may fit the business model; cash-equivalent presentation under IAS 7 could be defensible if risk is demonstrably insignificant — document the redemption mechanics, intraday liquidity, reserve quality and counterparties. 

Scenario B (Issuer under MiCA): An EU e-money institution issues an EMT. Recognise a financial liability at par on issuance; recognise reserve assets under IFRS 9 according to their nature; apply EBA liquidity/reserve composition RTS and maintain disclosures. 

9) Final word

Given the diversity of stablecoins and their operational frameworks, there is no one-size-fits-all rule for accounting for stablecoins. — it’s about reading the instrument, mapping it to the right standard, and documenting the judgement. With MiCA live, the US GENIUS Act enacted, and Asia’s regimes in force, the accounting answers are increasingly anchored in contractual rights and regulatory status. 

The complexities surrounding stablecoin accounting highlight the need for a detailed analysis of the underlying principles. As the digital assets landscape continues to evolve, so too will the accounting practices that govern it, requiring professionals to stay informed and adaptable.