Detailed Explanation of Taiwan’s Stablecoin Accounting Guidelines: How to Record USDC/USDT in Financial Statements, with 4 Practical Case Studies

Taiwan Stock Exchange and OTC Center issued guidelines for crypto assets, explicitly detailing the accounting treatment logic for stablecoins like USDC and USDT. This article focuses on this 67-page accounting treatment guideline, dissecting the complete accounting segregation logic of USDC and USDT on Taiwanese corporate books.

The two crypto asset guidelines jointly released by the Taiwan Stock Exchange and OTC Center on May 29, 2026, include the "Guidelines on Accounting for Stablecoin Transactions," which was drafted by the Accounting Research and Development Foundation on May 27 under the guidance of the Financial Supervisory Commission.

This article centers on this 67-page accounting guideline, breaking down the full accounting segregation logic of USDC and USDT on Taiwanese corporate books—from why the IFRS IC 2019 "Cryptocurrency Held" resolution is not applicable, to four practical case entries. Readers can also refer to the overview report of the two guidelines issued on May 29 for policy context.

IFRS IC 2019 Cryptocurrency Resolution Not Applicable to Stablecoins

In June 2019, the International Financial Reporting Standards Interpretations Committee (IFRS IC) issued a resolution on "Cryptocurrencies Held," concluding that cryptocurrencies with certain characteristics should be accounted for under IAS 2 "Inventories" or IAS 38 "Intangible Assets." However, this resolution applies only if three characteristics are met: (1) recorded on a distributed ledger, (2) not issued by a regulatory authority or other party in the jurisdiction, (3) and no contractual relationship exists between the holder and another party.

Stablecoins violate both item 2 and item 3. USDC has a clear issuer, Circle Internet Financial, LLC, and USDT is issued by Tether International, S.A. de C.V., both are issuing entities; and there are user agreement contracts with the issuer, including redemption rights.

The guideline explicitly states: Stablecoins cannot apply the 2019 IFRS IC resolution and must revert to IFRS basic standards (IAS 7/32/38, IAS 2, IFRS 9, IFRS 15) for case-by-case judgment.

Four-Stage Decision Tree: A → B → C → D

Chapter 2 of the guideline establishes a comprehensive accounting classification decision tree, with the following sequence and judgment logic (slide left/right on mobile):

| Node | Judgment Question | Segregation Result | | --- | --- | --- | | A | Does it meet the IAS 7 "cash" definition? | No (stablecoins are not widely used as a basis for transaction measurement) → Proceed to B | | B | Does it have contractual rights to receive cash or other financial assets? (IAS 32 §11) | Yes → Financial assets (proceed to C) / No → Proceed to D | | C | Does it simultaneously meet "short-term high liquidity" + "holding purpose to meet short-term cash commitments"? | Yes → Cash equivalents (IAS 7) / No → Financial assets (non-cash equivalents) | | D | Is it held for sale in the normal course of business? | Yes → Inventories (IAS 2) / No → Intangible assets (IAS 38) |

In the most common scenario for Taiwanese companies, node B is the true segregation point: whether the "redeemability" clause in user agreements can force the issuer to buy back, leading to two completely different accounting paths—financial assets or intangible assets.

Key Divergence: Effectiveness of Redemption Rights in User Agreements

The guideline lists four practical cases, with classification results depending on the combination of two dimensions: (1) whether the stablecoin is legislatively regulated; (2) whether users have passed issuer KYC, AML, CFT checks.

• Case 1: The stablecoin is legislatively regulated (assuming USDC and USDT issuers have obtained issuance permits under the US GENIUS Act, and the issuer has a legal obligation to redeem at face value for all holders). In this case, holders have contractual rights to demand redemption, meeting the IAS 32 §11 "financial asset" definition; since the company's intent is market sale, it classifies as "financial assets measured at fair value through profit or loss" (FVTPL) under IFRS 9 §4.1.1.
• Case 2: The stablecoin is not legislatively regulated, but users have passed identity verification, AML, CFT checks with Circle/Tether. On the surface, users have redemption rights, but user terms like USDC TERM 13, Circle Mint User Agreement 9, USDT TERM 4.1 explicitly state that the issuer can unilaterally modify terms without user consent, and in certain circumstances (long inactivity, failure of due diligence, inability to verify identity, court orders, regulatory compliance), may suspend, delay, or refuse redemptions.

This means the user's redemption right is not an irrevocable contractual right as required by IAS 32 §11, but a conditional right retained unilaterally by the issuer. Therefore, USDC/USDT in Case 2 do not meet the financial asset definition; and since they are not held for sale (path B→D→D), they are ultimately classified as "intangible assets with indefinite useful life" (IAS 38).

The guideline's footnote emphasizes: If Tether modifies user terms to explicitly limit the "discretion to delay or suspend" to specific circumstances (e.g., user default, systemic risk at Tether), USDT could potentially revert to a financial asset classification.

• Case 3: Users did not pass issuer KYC (e.g., obtained USDC/USDT from third-party exchanges), with no contractual right to redeem directly with the issuer, only able to sell on third-party exchanges. USDC/USDT are similarly classified as "intangible assets with indefinite useful life."
• Case 4: Exchange between virtual assets (e.g., 10 ETH for 22,000 USDC). According to IAS 38 §46-47, non-monetary asset exchanges with business substance, measured at the fair value of the exchanged asset (ETH) to determine the cost of USDC acquired. USDC is also classified as "intangible assets with indefinite useful life."

FVTPL Financial Assets vs. Intangible Assets: Practical Comparison

These two classifications have significant differences in accounting treatment, directly affecting a company's profit and loss statement and tax planning:

| Item | FVTPL Financial Assets (Case 1) | Intangible Assets with Indefinite Useful Life (Cases 2-4) | | --- | --- | --- | | Initial Recognition | Fair value | Cost plus directly attributable expenses (including fees) | | End-of-period Measurement | Re-measured at fair value | No re-measurement, only impairment testing | | End-of-period Exchange Rate | Closing rate at period end | Rate at acquisition date (IAS 21 §23) | | Recognition of Appreciation | Recognized in profit or loss | Not recognized | | Recognition of Impairment | Recognized in profit or loss | Recognized only if recoverable amount < carrying amount | | Subsequent Amortization | Not applicable | FIFO or weighted average method | | Fees | Can be expensed or capitalized | Must be included in acquisition cost | | Disposal | Cumulative difference recognized in profit or loss | Disposal gain/loss = actual proceeds – carrying amount |

Referring to a Taipei-based company's (laptop retailer) case in the guideline: On August 15, they received 120k USDC as consideration, with USD/NTD exchange rate at 31. If classified as FVTPL (Case 1), a decline to 29 on December 31 would require recognizing a loss of 240k NTD, and upon redemption at the exchange rate of 30 on January 15, recognize a gain of 120k NTD. If classified as an intangible asset (Case 2/3), the December 31 recoverable amount remains at 3.72 million NTD (no impairment), and upon redemption on January 15, the disposal loss of 120,000 NTD is directly recognized based on actual proceeds.

For companies, the FVTPL path causes a single stablecoin holding to experience two-way fluctuations—"losses first, gains later"—across quarters; the intangible asset path only reflects impairment (one-way, asymmetric), concentrated at disposal.

Genius Act Transition Period and Recommendations for Taiwanese Companies

The US GENIUS Act was signed into law by President Trump on July 18, 2025, as Public Law 119-27, incorporated into the U.S. Code Title 12 (Banks and Banking). The law takes effect no later than January 18, 2027, and only stablecoin issuers with issuance permits can issue stablecoins in the U.S.; from July 18, 2028, digital asset service providers cannot offer or sell unpermitted stablecoins to individuals within the U.S. As of May 2026, neither USDC nor USDT issuers have obtained GENIUS Act permits.

This means that during the current transitional period (May 2026–January 2027), the accounting classification for stablecoins for Taiwanese companies mainly falls into the "intangible assets with indefinite useful life" path covered in Cases 2, 3, and 4. Even if companies have passed KYC checks with Circle/Tether, due to issuer clauses reserving modification and redemption refusal rights, they still do not meet the definition of financial assets.

Practically, the guideline specifies several measurement standards: fair value based on the last trade price at 23:59:59 in major markets (e.g., Coinbase); foreign currency translation per IAS 21 §23; impairment testing at least annually and when indicators appear; recoverable amount as the higher of "fair value less disposal costs" and "value in use." For companies disposing of multiple USDC/USDT holdings, FIFO or weighted average methods must be used to determine unit costs.

For companies directly involved in international payments (such as cross-border e-commerce, traders), if USDC or USDT obtain GENIUS Act permits after January 18, 2027, their accounting classification in Taiwan could shift from intangible assets to FVTPL financial assets, allowing real-time reflection of fair value changes on the books. This is a key point for Taiwanese financial teams to monitor closely over the next eight months.

• This article is reprinted with permission from: "Chain News"
• Original title: "USDC/USDT Accounting in Taiwan: FVTPL vs. Intangible Assets—The Key Difference Lies in KYC"
• Original author: Elponcrab