Can Fiat-backed Stablecoins Be Considered Cash or Cash Equivalents under International Financial Reporting Standards Rules?

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F21%3A00120748" target="_blank" >RIV/00216224:14560/21:00120748 - isvavai.cz</a>

Result on the web

<a href="https://onlinelibrary.wiley.com/doi/abs/10.1111/auar.12344" target="_blank" >https://onlinelibrary.wiley.com/doi/abs/10.1111/auar.12344</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.1111/auar.12344" target="_blank" >10.1111/auar.12344</a>

Result language

angličtina

Original language name

Can Fiat-backed Stablecoins Be Considered Cash or Cash Equivalents under International Financial Reporting Standards Rules?

Original language description

Stablecoins are a rapidly evolving subcategory of cryptocurrency that aim to reduce the price fluctuations of traditional cryptocurrencies and thus become a common digital payment instrument. This paper aims to assess the material substance of fiat-backed stablecoins to determine whether fiat-backed stablecoins could be considered, in accordance with IFRS, as cash or cash equivalents. We chose 11 fiat-backed stablecoins representing 99.97% of the total market capitalisation of all fiat-backed stablecoins. Using a three-step approach, we performed an analysis of the legal and general terms and conditions of the selected stablecoins and of cryptocurrency exchanges, and quantitatively analysed their risk characteristics in comparison with fiat currency pairs, money market indexes and instruments, and traditional cryptocurrencies. The results show that nine of the 11 stablecoins met the objective requirements of cash equivalents according to their material substance and, using an extensive interpretation of IAS 7, could be reported as cash equivalents. This study enhances understanding of the material substance of fiat-backed stablecoins for their financial reporting and can be used by entities when creating accounting policies under existing IFRS rules and by accounting standard setters as evidence when formulating new rules or officially interpreting existing ones to provide guidance on the financial reporting of fiat-backed stablecoins.

Czech name

—

Czech description

—

Type

J_imp - Article in a specialist periodical, which is included in the Web of Science database

CEP classification

—

OECD FORD branch

50205 - Accounting

Project

—

Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2021

Confidentiality

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Name of the periodical

Australian Accounting Review

ISSN

1035-6908

e-ISSN

1835-2561

Volume of the periodical

31

Issue of the periodical within the volume

3

Country of publishing house

AU - AUSTRALIA

Number of pages

23

Pages from-to

233-255

UT code for WoS article

000659307600001

EID of the result in the Scopus database

2-s2.0-85107455701