cash equivalents

The US accounting board FASB proposes specific conditions necessary for stablecoins to be treated as cash equivalents. The FASB stated that relying solely on secondary-market liquidity is insufficient for this classification. Instead, holders must have direct issuer redemption rights and maintain one-to-one liquid reserves.

RLUSD is a regulated stablecoin issued by Ripple Labs, designed to maintain a 1:1 value with the U.S. dollar. It is backed by cash, short-term U.S. Treasury bills, and cash equivalents, and is redeemable for U.S. dollars by approved entities.

Invesco, a trillion-dollar asset manager, is entering the tokenized stablecoin reserve sector. The fund will focus on investments in U.S. Treasuries, repo agreements, and cash equivalents to maintain a stable $1 net asset value.