The Financial Accounting Standards Board (FASB) voted in support of allowing companies to report Bitcoin holdings at fair value.
This could likely be a massive regulatory development in the context of institutional investors like Blackrock, Fidelity, and Bitwise seeking to get their spot Bitcoin ETF applications approved.
The FASB vote means companies are able to measure the value of Bitcoin and other cryptocurrencies based on accounting rules. The new accounting rules, likely to be published by the end of 2023, will mandate a fair value measurement that companies can follow when they report crypto holdings, subject to price fluctuations.
These rules will come into effect from 2025, while companies willing to report prior to that will have the option to.
John Deaton, the attorney representing thousands of XRP token holders in the U.S. Securities and Exchange Commission (SEC) lawsuit, described the FASB accounting rules initiative as a very significant development at the face of it.
However, the attorney would like to see in the longer term if non-crypto native companies like MicroStrategy will be open to mentioning crypto holdings in their balance sheets. He said,