The Financial Accounting Standards Board (FASB) has introduced a proposal that could give certain stablecoins “cash equivalent” status under U.S. accounting rules.

The proposal, released Tuesday, seeks to clear up lingering questions about how stablecoins should be accounted for under generally accepted accounting principles (GAAP).

Under the suggested framework, a stablecoin would potentially qualify as a cash equivalent if it is supported by liquid reserves equal to or exceeding the value of all outstanding tokens. Those reserves would also have to be disclosed annually, while users would need the ability to redeem the tokens for U.S. dollars whenever they choose.

FASB said its proposed update would include illustrative examples showing how existing cash-equivalent rules could apply to certain digital assets. The guidance is intended to address inconsistent interpretations that have resulted in different accounting treatment for stablecoins.

If approved, eligible stablecoins could be treated alongside traditional highly liquid assets such as U.S. Treasuries, commercial paper and money market funds.

The accounting board began developing crypto-related standards in 2023 as digital assets became more prominent on corporate balance sheets. Its latest proposal is part of an “accounting standards update” explaining both the recommended changes and the reasoning behind them.

The proposal remains open for public review and is not yet an official accounting rule. FASB has asked stakeholders to submit comments by Nov. 19 before it considers finalizing the guidance.