The American Institute of CPA (AICPA) has developed a 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.
Stablecoins have gained prominence for their role in trading, making them attractive to investors and businesses. However, there has not been consistency in the information available to token holders for stablecoins. AIPCA aims to remedy this with its proposed criteria.
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.
AICPA&CIMA senior director, assurance and advisory innovation Ami Beers said: “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. 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 standardised framework, the AICPA seeks to reduce inconsistencies in measuring and reporting issued tokens and available assets backing those tokens.
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By GlobalData“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. “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 finalised 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).
