The AICPA has developed a comprehensive set of criteria to help increase transparency around stablecoins, a type of digital asset backed by traditional currency or other types of assets. The document will provide the first framework of its kind to those issuing stablecoins, backed by fiat currency, to report relevant information to stakeholders and will provide the basis for attestation services around this asset class.
The AICPA welcomes comments on this exposure draft for stablecoin criteria, with the comment period ending January 29, 2024.
Crypto assets and other digital assets are often in the news for reasons ranging from their novelty, unpredictability, or utility in various markets. Stablecoins in particular have gained prominence for their role in trading, making them attractive to investors and businesses. However, there hasn’t been consistency in the information available to token holders for stablecoins. These new criteria aim to remedy this.
Regulatory bodies such as the New York State Department of Financial Services (DFS) already require reporting on and attestation of stablecoins, underlining the increasing importance of regulatory compliance.
“The AICPA is excited to develop the first available framework for reporting on stablecoins, and to be at the forefront of bringing transparency and consistency to the digital assets space,” said Ami Beers, senior director, assurance and advisory innovation at the AICPA & CIMA. “We’re hopeful that these criteria will serve as the basis for evaluating the sufficiency of reserves that back stablecoins in attestation services that practitioners provide to their clients.”
The proposed criteria aim to provide transparency, not only benefiting token issuers but also token holders, regulators, and the wider industry. By creating a standardized framework, the AICPA seeks to reduce inconsistencies in measuring and reporting issued tokens and available assets backing those tokens.
“When developing this framework, we focused on the needs of the stakeholders which include consistency, comparability, and transparency of information, which will ultimately drive trust in these types of digital assets,” said Jay Schulman, chair of the Attestation Subgroup of the AICPA Digital Assets Working Group, and principal at RSM US LLP. “We’re looking forward to integrating comments we receive into the final document, creating a robust tool for practitioners performing work in this emerging area of accounting and finance.”
Once these guidelines are finalized and issued by the AICPA, the criteria can be used by practitioners when conducting an attestation engagement to perform procedures and generate a report on the issuer’s claims about the sufficiency of assets for redemption linked to asset-backed, fiat-pegged tokens (that is, stablecoins).
Request for Comment
To ensure the criteria meet industry needs, the AICPA Assurance Services Executive Committee is seeking public feedback on the proposed stablecoin criteria. In the section labeled “Guide for Respondents,” those interested in contributing their professional and experience-based input can answer a brief series of questions regarding the information presented in the proposed criteria.
For optimal feedback, please include specific paragraphs from the exposure draft or criterion numbers in your responses to explain or support your reasoning. Feel free to offer suggestions to clarify the wording within the draft. Feedback on the terms and definitions in the glossary will also be warmly received.
Professionals and experienced individuals are encouraged to download the exposure draft and submit written comments to StablecoinED@aicpa-cima.com before January 29, 2024.
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Tags: Accounting
