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Yahoo
15 hours ago
- Business
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GENIUS Act leaves stablecoin accounting, risk gaps
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. U.S. lawmakers nudged open the door to greater stablecoin adoption with a series of crypto- and digital asset-related acts last week — with President Donald Trump signing the GENIUS Act into law and the House of Representatives passing both the Digital Asset Market Clarity Act of 2025 or CLARITY Act, as well as the Anti-Central Bank Digital Currency Surveillance State Act, in votes Thursday and Friday. While these three pieces of legislation represent a running start at providing structure to the previously murky stablecoin space, there are still questions left unanswered for finance chiefs weighing the risks and potential rewards of tapping such assets. CFOs also must carefully consider tax and accounting related rules, as well as how to hold and report such assets on their balance sheets, Nassim Eddequiouaq, CEO and co-founder of stablecoin issuance platform Bastion said. 'I think the one piece that is going to be important for CFOs is really monitoring everything around accounting rules,' Eddequiouaq told CFO Dive in an interview. Opening the door Stablecoins have crept further into CFOs' sight lines throughout the year, as President Trump makes good on campaign promises to bring cryptocurrency firms more deeply into the mainstream. As such, a spotlight has been trained on the GENIUS Act as it moved through the U.S. Senate and House, with experts and industry players championing the purported regulatory clarity the act aims to bring to the space, CFO Dive previously reported. Under the act, only 'permitted issuers' are able to issue such coins for use by U.S. persons, according to a summary. Permitted issuers 'must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer,' according to the summary, and must be regulated by the 'appropriate federal or state regulator.' The clear guidelines provided by the act could provide a much-needed level of legitimacy to stablecoins for finance leaders, acting as the 'green light' finance chiefs need for wider adoption, EY Global Blockchain Leader Paul Brody previously told CFO Dive. Though public blockchains making use of such tokens have been available for many years, the lack of regulatory clarity surrounding their usage meant that 'business users like CFOs have been reluctant to dive in,' Paul Brody, global blockchain leader for Big Four accounting firm Ernst & Young told CFO Dive in an emailed statement. 'Now that the legislation is in place, I think we will see a huge acceleration in adoption by enterprises. The cost benefits of moving some payments to blockchain rails are substantial,' he said in the statement. 'Consumers already know this — they're the ones already doing about $800 billion a month in stablecoin transactions. Expect businesses to follow now that the path looks safe." Peeking under the accounting hood Still, CFOs, corporate treasurers and accounting leaders face lingering questions about what integrating stablecoins could mean for their business — and, critically for finance leaders, how those assets should be reported. Among other terms, for example, the GENIUS Act establishes monthly reporting requirements for stablecoin issuers, including requiring an attestation engagement to be included in the reports. Accounting standard setters and trade organizations have already taken stock of how the Act could shift reporting requirements, with some issuing their own criteria earlier in the year in advance of such legislation. The 2025 Criteria for Stablecoin Reporting guidance, first laid out by the the American Institute of CPAs in March, offers 'a framework for issuers to present information on the outstanding stablecoins and the availability of the assets that back them,' Ami Beers, senior director, assurance and advisory innovation, AICPA told CFO Dive in an emailed statement. 'We believe that these criteria can be used by issuers in preparing the monthly reports required by the Act.' Among other things, the criteria can help issuers present information such as the number of tokens in circulation, the nature and amount of the reserve assets that back those tokens, and the comparison of tokens in circulation and reserve assets, Beers said. 'This information helps build trust by helping stakeholders understand what backs the tokens and how those amounts are verified and reported.' Meanwhile, companies have begun to adopt the crypto-specific fair value accounting standards issued by the Financial Accounting Standards Board in 2023, which became effective December 2024. The FASB declined to comment on the GENIUS Act. However, the board is currently in the midst of an agenda consultation, and 'stakeholders have identified several standard-setting areas of interest, including potential projects related to stablecoins,' a spokesperson told CFO Dive in an email. 'The Board will discuss all stakeholder feedback at a future meeting.' Although the GENIUS Act lays out definitions for stablecoin issuance, the 'next set of rules is probably going to be around accounting for U.S. companies: what is legal tender, what is not, what is treated as cash and cash equivalent, what is not,' Eddequiouaq said. These are key questions today's finance chiefs and corporate treasurers are considering, he said. In considering stablecoins, CFOs and company leadership also need to keep a careful eye on what integrating such assets mean for their compliance and risk functions — the regulatory requirements for digital assets, their issuance and related factors differ from traditional such assets and therefore represent a new set of risks, Eddequiouaq said. At the end of the day, companies should be 'focused on their core business,' he said. 'Stablecoin is not their core business.' 'Stablecoins are just a tool,' he said. 'They're going to disappear behind the scenes, and anything that helps make that more and more invisible, you should be working towards.' Securities, revisited As finance chiefs mull the potential impact of the GENIUS Act, they also need to ensure they are keeping a careful eye on the next round of stablecoin-related legislation, which is likely to play out over familiar stomping grounds — who will be responsible for regulating which assets, and which assets count as securities. Under the terms of the GENIUS Act, payment stablecoins are not considered securities, eliminating in part historic contention between issuers and government regulators such as the Securities and Exchange Commission, which under previous SEC Chair Gary Gensler sued several such firms for violating securities law relating to the issuance of stablecoins. The CLARITY Act aims to draw even firmer boundaries; under the proposed act, which has yet to pass the Senate, the bill seeks to create a framework for digital commodities — which it defines as 'digital assets that rely upon a blockchain for their value,' and notes 'The Commodity Futures Trading Commission must generally regulate digital commodities transactions,' according to a summary. However, the legislation also 'provides the SEC with jurisdiction over digital commodity activities and transaction engaged in by certain brokers and dealers on alternative trading systems and by national securities exchanges.' 'The GENIUS Act made it pretty clear that the issuer cannot, solely because a holder holds the stablecoin, distribute yield to that holder,' Eddequiouaq said. 'I'm hoping that the CLARITY Act helps define the line of what is acceptable versus not acceptable' regarding the legal relationship between coin holders and issuers, he said. As the next round of stablecoin-related legislation circulates in the House and Senate, accounting organizations and standard setters are also keeping a close eye on how the budding industry takes shape. 'While the AICPA does not comment directly on pending legislation, we remain actively engaged in tracking policy and regulatory developments that may affect digital assets, including stablecoins,' Beers said in an emailed response to questions. He noted that the CLARITY Act includes 'amendment language to the GENIUS Act that would require stablecoin issuers to establish and maintain internal controls over stablecoin operations and reserves as well as obtain an annual attestation report on the effectiveness of those controls. Because controls surrounding digital asset operations are an integral part of, and a foundation for, the reliability of information presented by stablecoin issuers, it is vital that those controls are implemented, operated, and monitored,' Beers said. Sign in to access your portfolio
Yahoo
15 hours ago
- Business
- Yahoo
IPOs surge 35% in H1 despite policy shifts, market volatility: EY
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: The number of U.S. initial public offerings surged to 109 during the first half of 2025, increasing 35% compared with the same period last year despite stock market volatility and shifts in tariff and other policies, EY said. Although the number of IPOs is the biggest first-half tally since 2021, proceeds from offerings fell to $17.1 billion, or 9% less than the same period last year, EY said in a report. The IPO outlook worldwide 'remains cautiously optimistic,' with a solid pipeline for large offerings and a steady stream of smaller deals, EY said. Still, 'a broad-based resurgence in global IPO activity depends critically on cooperative trade frameworks, accommodative monetary policy, controlled inflation and geopolitical de-escalation.' Dive Insight: Unusually high policy uncertainty roiled the stock market during the first six months of the year, EY said, noting that the CBOE Volatility Index careened between 14.8 and 52.3, a gap five times wider than during the same period in 2024. The so-called VIX measures expected volatility in the Standard & Poor's 500 stock index. 'Fueled by uncertain U.S. trade policy and ongoing geopolitical tensions in Eastern Europe and the Middle East, this heightened volatility is compelling companies to reimagine their exit strategies, stay private longer or pursue listings with smaller float sizes,' EY said. Shifts to trade, regulation, immigration and fiscal policies by the Trump administration have prompted Federal Reserve policymakers to hold off on trimming borrowing costs until they can determine the impact of such changes to inflation, employment and financial markets. 'Market volatility serves as a critical barometer for IPO activity,' signalling investor expectations for future price movements and influencing 'sentiment, valuation multiples and public market receptivity to new offerings,' EY said. Higher volatility usually indicates risk aversion and poses a challenge for IPO candidates. Yet global capital markets this year are apparently adapting to political and geopolitical shocks, improving the outlook for IPOs, EY said. 'Trade tariffs, regional conflicts and macro-policy uncertainty — once primary triggers for volatility — are increasingly being priced into asset valuations, with investors and companies adjusting to what many now regard as a 'new normal,'' according to EY. After turbulence during the first six months of 2025, equity markets have regained ground, the VIX and other 'fear indexes' have stabilized and companies launching IPOs are diversifying to markets with deep pools of capital such as Hong Kong, EY said. IPO activity in the U.S., Canada and Latin America quickened late in the second quarter as concerns about tariffs and economic vulnerabilities eased, EY said. U.S. IPOs in the period rose 20% on average during the first day of trading, and offerings that raised $50 million or more in gross proceeds returned 40% through the end of Q2, EY said. Five of the 10 largest IPOs occurred during June, Rachel Gerring, EY Americas IPO leader, said. 'This suggests that IPO aspirants are proactively preparing and becoming increasingly agile, seizing market opportunities as they arise,' she said in a statement. 'With this renewed momentum, we remain optimistic about the remainder of 2025, assuming broader economic indicators remain stable,' Gerring said. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
4 days ago
- Business
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Consumer sentiment edges up on expectations inflation will cool
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Dive Brief: Consumer sentiment in July edged up to the highest level in five months as pessimism for the short-term business outlook eased and expectations for inflation in a year fell to 4.4% from 5%, the University of Michigan said Friday. At the same time, household expectations for personal finances declined last month and sentiment persists well below both the level in December and the historical average, the university found in a monthly survey. 'Consumers are unlikely to regain their confidence in the economy unless they feel assured that inflation is unlikely to worsen, for example if trade policy stabilizes for the foreseeable future,' Joanne Hsu, director of the university's consumer surveys, said in a statement. Dive Insight: Recent stability in consumer sentiment coincides with mixed economic signals, along with widening opinions among Federal Reserve officials on the outlook for jobs and inflation, and whether to cut borrowing costs as soon as this month. Retail sales rose 0.6% in June after a two-month slump. Ten out of 13 retail categories recorded sales gains, including motor vehicles, food and beverages, and building materials, the Census Bureau reported Thursday. Unemployment eased last month to 4.1% from 4.2% in May as U.S. payrolls expanded by 147,000, a healthy clip. Yet state and local government, rather than the private sector, accounted for roughly half of the hiring. Also, the consumer price index increased at a 2.7% annual rate in June compared with 2.4% the prior month, the Bureau of Labor Statistics said Tuesday. Imported goods led the price gains, indicating that tariffs have to a degree fueled inflation. The price for apparel, household furnishings and appliances rose 0.4%, 1% and 1.9%, respectively, the BLS said. Prospects for inflation, employment and economic growth hinge to a big degree on whether tariff-induced inflation eases after a few months or persists into next year. Several Fed officials in recent weeks have warned that import prices may provoke a sustained rise in prices. They have favored holding off on a reduction in the main interest rate until gaining greater clarity on price pressures. 'I see upward pressure on inflation from trade policies, and I expect additional price increases later in the year,' Fed Governor Adriana Kugler said Thursday. 'Given the stability in the employment side of our mandate, with the unemployment rate still at historically low levels, elevated short-run inflation expectations and goods inflation rising due to the upward pressure from tariffs, I find it appropriate to hold our policy rate at the current level for some time,' Kugler said in a speech. Import duties will probably push up inflation by about 1 percentage point during the second half of this year 'and the first part of next year,' New York Fed President John Williams said Wednesday. Holding the federal funds rate at its 'modestly restrictive' level from 4.25% to 4.5% 'is entirely appropriate to achieve our maximum employment and price stability goals,' Williams said in a speech. Fed Governor Christopher Waller disagrees. On Thursday he called on his fellow policymakers to cut the federal funds rate by 0.25 percentage point at their meeting this month. 'Tariffs are a one-off increase in the price level and do not cause inflation beyond a temporary surge,' he said in a speech. Also, 'while the labor market looks fine on the surface, once we account for expected data revisions, private-sector payroll growth is near stall speed and other data suggest that the downside risks to the labor market have increased,' Waller said. 'With inflation near target and the upside risks to inflation limited, we should not wait until the labor market deteriorates before we cut the policy rate,' he said. Over time, the central bank should aim to trim the benchmark rate to 3%, a 'neutral' level that Fed officials believe would neither slow nor spur economic growth, Waller said. Recommended Reading Jobless claims edge up, amplifying Fed signals for rate cut Sign in to access your portfolio
Yahoo
11-07-2025
- Business
- Yahoo
Tesla CFO offloads another $1.7M in stock
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Tesla CFO Vaibhav Taneja executed two consecutive stock sales this week, offloading approximately $1.2 million in a July 7 transaction and then selling $587,880 more on July 8, according to securities filings. Taneja, who took the Austin, Texas-based electric vehicle maker's CFO seat in 2023, has repeatedly sold stock throughout the first half of the year. In June, the finance chief sold about $3 million in shares across multiple transactions, according to company filings. The most recent sales come as scrutiny of the EV maker's corporate governance which reported a 14% slump in vehicle deliveries at the top of the month, is facing rising pressure from its shareholders, as well as backlash against the brand's reputation stemming from CEO Elon Musk role in President Donald Trump's administration. The company's executive leadership has come under yet more attention in recent days due to the latest twist in an ongoing feud between Musk and Trump. Also this week, unverified documents filed with the Federal Election Commission listed Taneja as the treasurer of Musk's newly-formed political party, raising questions about potential conflicts of interest and the relationship between Musk and Tesla's executive leadership, CFO Dive previously reported. The FEC has requested additional information on both filings listing Taneja as treasurer, one for the 'America Party (AEMP)'— decried as a hoax on Twitter by Musk — and another, separate filing for 'The America Party (TAP).' Both filings gave a California address with an incorrect zip code and list a phone number which routes back to the Tesla investor relations team. 'It has come to the attention of the Federal Election Commission that you may have failed to include the true, correct, or complete committee information under 52 U.S.C. § 30103(a) when you filed FEC Form 1,' the letters from the FEC read. The company is also facing heightened scrutiny from its shareholders. On Wednesday, a group of 27 shareholders responsible for $1.5 trillion in assets under management sent a letter to the EV maker's board of directors, urging the company to set a date and time for its annual general meeting in light of growing concerns regarding corporate governance and a need to meet legal obligations. Tesla designated November 6 as the date of its annual shareholders meeting and listed a July 31 deadline for the submission of proposals by shareholders, it said in a Thursday filing with the Securities and Exchange Commission. Shareholders cited Texas law which noted the EV maker was running up against a legal deadline to hold its annual meeting — which it is required to take place within 13 months of its prior meeting, marking a July 13 deadline for Tesla. The 'lack of transparency raises serious concerns about the company's respect for shareholder rights,' the Wednesday letter reads. The group of shareholders — which included public financial officers, such as Brooke E. Lierman, comptroller for the State of Maryland, New York City Comptroller Brad S. Lander and Elizabeth Steiner, MD Oregon state treasurer — also pointed to other concerns raised by institutional shareholders, noting an increase in investor scrutiny. Seven state treasurers — included Lierman — sent a letter to Tesla Board Chair Robyn Denholm in April calling for improved board accountability and shareholder transparency, for instance. The move followed a public letter issued that same month by the American Federation of Teachers to the EV maker's chief fiduciary officer, raising concerns over its material governance, the shareholders noted Wednesday.
Yahoo
02-07-2025
- Business
- Yahoo
Boeing picks Lockheed alum for CFO seat
This story was originally published on CFO Dive. To receive daily news and insights, subscribe to our free daily CFO Dive newsletter. Boeing swiped former Lockheed Martin finance chief Jesus 'Jay' Malave to serve as the jet maker's next CFO, with Malave to succeed Brian West in the role effective Aug. 15, according to a Monday press release. Malave served a three-year term as Lockheed Martin's finance chief, joining the defense manufacturer in January 2022 before departing from the position in April, according to his LinkedIn profile. The Arlington, Virginia-based company said West, who has served as its CFO since August 2021, will transition to the role of senior advisor to President and CEO Kelly Ortberg, also effective Aug. 15. 'With Boeing making progress in our recovery, Brian and I believe this is the right time to hand the reins to a new leader as we embark on the next chapter of our company's growth and development,' Ortberg said in an email to employees shared with CFO Dive. 'Brian will continue as a senior advisor to me and oversee a smooth transition to Jay once he joins the company.' The CFO swap comes after a rocky period for Boeing. Orberg termed the company's past few years as 'some of the most consequential in Boeing's history,' crediting CFO West's role for navigating its recovery efforts, according to the email. West 'successfully guided us through last year's historic capital raise and ensured our team always had the resources to continue the critical work to strengthen safety and quality across our operations,' Ortberg said, referring to the approximately $22 billion raised by the company in an October 2024 stock sale. 'I look forward to his continued counsel in his new role.' Prior to Lockheed Martin, West's successor Malave served as senior vice president and CFO for space and defense manufacturer L3Harris Technologies. Malave has also logged past experiences in the aerospace industry at United Technologies Corporation before its merger with Raytheon Technologies in 2020, as well as during an 11-year stint at aerospace component manufacturer Pratt & Whitney, according to his LinkedIn profile. The CFO appointment marks the latest C-suite change at Boeing since Ortberg took its top executive seat last year, as five members of its executive team departed the company shortly after Ortberg took over, including its chief information officer and communications chief, Bloomberg reported at the time. On Tuesday, Boeing also announced another executive shift, appointing company veteran Stephen Parker to the permanent role of president and CEO of its defense, space & security (BDS) business effective immediately, according to a press release. The move comes after Parker stepped into the seat on an interim basis in September 2024. Malave will step into the top financial seat as Boeing continues to face both public and regulatory scrutiny in the wake of a series of plane crashes in recent years, as well as other headwinds stemming. After a door plug flew off an Alaska Airlines flight last year, the company came under heightened scrutiny from federal regulators. In June, federal investigators faulted Boeing for failing to provide adequate training and oversight for its manufacturing operations, which led to the incident, The Wall Street Journal reported. Malave will join a C-suite tasked with both regaining public confidence as well as returning to profitability, after such incidents and a host of other challenges left the jet maker confronting severe financial setbacks. Last October, Ortberg announced the company would be laying off about 17,000 workers, as well as announcing its stock sale, both aimed at cutting down costs in the midst of a worsening liquidity crisis, AP News reported. The moves came as the company was facing an ongoing strike of 33,000 machinists before reaching an agreement in November. The strike exacerbated already strained cash flow and production challenges. In the wake of the Alaska Airline incident, federal regulators put a cap on the production of Boeing 737s until they felt confident of its manufacturing safety guidelines, AP reported. The Federal Aviation Authority is not yet ready to lift that cap, its acting administrator said in early June according to a Reuters report. In recent months, the jet maker has moved to regain some of its lost ground; for its most recent quarter ending March 31, Boeing narrowed its net loss attributable to shareholders to $37 million in the first quarter, compared to $343 million for the prior year period, according to its earnings report. The company also reported $19.5 billion in revenue, compared to $16.6 billion in the prior year period, according to its earnings results. Boeing also released a 20-year forecast in June anticipating strong continued demand, with its global fleet projected to reach about 50,000 commercial aircraft by 2044, according to company releases. However, the company's safety record has drawn fresh scrutiny after an Air India flight on a London-bound Boeing 787-8 Dreamliner crashed less than a minute after takeoff on June 12, killing at least 270 people, the BBC reported. 'Our deepest condolences go out to the loved ones of the passengers and crew on board Air India Flight 171, as well as everyone affected in Ahmedabad,' CEO Ortberg said in a statement on the flight published by the company at the time. 'I have spoken with Air India Chairman N. Chandrasekaran to offer our full support, and a Boeing team stands ready to support the investigation led by India's Aircraft Accident Investigation Bureau.' 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