Corporate treasurers are holding more cash, keeping short-term portfolios anchored in traditional liquid assets and leaving stablecoins largely outside day-to-day liquidity strategy, according to the 2026 AFP Liquidity Survey Report.

Based on 309 responses collected in March 2026, the 21st annual survey from the Association for Financial Professionals, underwritten by Invesco, shows a liquidity environment shaped by political uncertainty, inflation, tariff risk and geopolitical shocks. The findings show treasury teams adapting cautiously, diversifying within tight constraints while implementing firmer controls over short-term investment decisions.

AFP’s headline finding is that 46% of organisations increased US cash balances in the 12 months to March 2026, up from 38% in the previous year’s survey. Another 40% reported no significant change, while 14% reduced US cash, down from 16% a year earlier.

Balance sheet caution is equally evident in portfolio construction. AFP says organisations hold an average of 83% of short-term investment balances in safe and liquid vehicles, namely bank deposits, money market funds and Treasury securities. Bank deposits still account for the largest allocation at 42%, but that is the lowest share since 2011, with some of the decline redirected into Treasury securities.

For financial professionals, the message is one of cash discipline under pressure: more liquidity, tighter policies and greater scrutiny over where short-term balances are placed.

Innovation sits far behind that safety bias. Only 1% of organisations are piloting or using stablecoins or tokenised funds in limited or specific applications, while 9% are actively exploring use cases. A further 55% are aware of stablecoins and tokenised products but are not exploring them, and 35% are not familiar with their organisation’s status on the issue.

Liquidity caution deepens as uncertainty spreads

US cash holdings show the clearest shift in the survey. Within the US, 16% of organisations said balances were much larger, and 30% said they were somewhat larger. A further 40% reported no significant change, 9% said balances were somewhat smaller, and 5% said they were much smaller.

Outside the US, the picture is steadier. Sixty-two per cent said cash and short-term balances outside the US were unchanged, compared with 65% in 2025. Another 20% reported an increase and 18% reported a decrease, up from 15% last year. Only 20% of organisations with investments outside the US used offshore deposits to increase yield, rising to 26% among organisations with annual revenue of at least US$1bn and 31% among publicly owned companies.

Drivers of rising cash include stronger operations and deliberate risk buffers. Seventy-nine per cent said increased operating cash flow had a significant or some impact on higher cash holdings, up from 74% last year. That includes 26% reporting a significant impact and 53% reporting some impact.

Stronger operating cash flow is only part of the story. Political and market risks are also pushing companies to hold more liquidity on hand. Domestic political and regulatory risks, including US trade policy, had some or a significant impact on increased cash for 49% of respondents, while global geopolitical risks were cited by 48%.

Financing activity also played a role. Another 48% pointed to increased debt outstanding, access to debt markets, securitisation, factoring or supply chain finance, while 46% cited debt repayment, debt movement or freed-up cash flow. Lower capital expenditure affected 45%, acquisitions or launched operations affected 42%, tariffs on trading partners affected 35%, and supply chain issues affected 30%.

The survey report frames those findings against a backdrop in which treasury teams are having to plan around several overlapping risks, rather than a single source of uncertainty.

Trade policy is one pressure point. The report cites the “Liberation Day” tariffs introduced in April 2025, the market declines that followed, subsequent negotiations over lower tariff rates and a February 2026 Supreme Court ruling on presidential tariff authority. That uncertainty has fed directly into cash planning, with companies trying to understand the potential impact on costs, margins and working capital.

Political risk is not confined to trade policy. The report points to the continuing Russia-Ukraine war, heightened Middle East tensions and conflict involving Iran, which have contributed to higher oil prices. Meanwhile, inflation rose to 3.3% in March 2026 from 2.4% in February, while the Fed held policy rates at 3.50%-3.75% and unemployment stood at 4.3%.

Inflation and capital spending remain the main drains on liquidity, as cash holdings fell. Fifty-eight per cent said inflation had significantly or somewhat reduced cash holdings, unchanged from last year, with the same share citing increased capital expenditure. Reduced operating cash flow affected 49%, debt repayment 47%, acquisitions or launched operations 43%, domestic political and regulatory risks 43%, tariffs on trading partners 40%, share repurchases and dividends 35% and supply chain issues 35%.

Respondent comments suggest that companies are also using cash to keep options open. Some cited improved collections, expense discipline, asset sales and preparation for opportunistic capital deployment, while others pointed to rising energy prices, tax changes, cuts in federal grant funding and cash repatriation rules. Liquidity management is therefore serving two purposes: absorbing external shocks and preserving room for corporate action.

Looking into the second and third quarters of 2026, AFP says most organisations expect cash and short-term investment holdings to remain steady. Some expect an increase, while a smaller share expects a decline.

Policy guardrails shape cautious diversification

Caution is also showing up in the rulebook. Seventy-five per cent of organisations have a written investment policy governing short-term investment strategy, one percentage point above last year. AFP notes that written policies set permitted vehicles, allocation limits, credit rating requirements, approval processes, authorised investors, risk parameters and escalation procedures.

Larger and more investment-focused organisations are more likely to have those guardrails in place. Eighty-two per cent of companies with annual revenue of at least US$1bn have written investment policies, as do 84% of net investors, 79% of investment grade companies and 80% of publicly owned organisations. By contrast, the share falls to 64% for organisations with annual revenue below US$1bn, 67% for net borrowers, 68% for non-investment-grade companies, and 59% for privately held organisations.

Policy objectives remain heavily weighted towards capital preservation. Among organisations with a written cash investment policy, 61% rank safety as the most important objective, unchanged from 2025. Liquidity is next at 34%, slightly below 35% last year, while yield remains a distant third objective. 

Most companies are not rewriting their policies, but the changes under review show where pressure is building. Twenty-four per cent of respondents are considering revisions, while 76% are not. Duration or maturity management is influencing 12% of potential policy revisions. Just 5% are considering stablecoin capabilities, 5% are looking at money market ETFs, and 5% are adding counterparty or concentration risk provisions for bank deposits. Only 3% are adding cryptocurrency provisions, and 3% are adding tokenisation capabilities.

Approved investment vehicles show how conservative policy frameworks are diversifying at the margin. Bank deposits remain the most commonly approved vehicle at 80%, up from 78% in 2025 but well below 91% in 2024. Treasury securities are approved by 79%, up from 76% last year, while government or Treasury money market mutual funds are approved by 77%, down from 80%.

Commercial paper is approved by 53% of organisations, followed by repurchase agreements and agency securities at 35% each, municipal securities at 34%, prime or diversified money market mutual funds and asset-backed securities at 30% each, and muni or tax-exempt money market funds at 29%. Separately managed accounts are approved by 22%, ETF bond or cash strategies by 19%, Eurodollar deposits and enhanced cash or ultrashort bond funds by 16% each, and sovereign, supranational and agency securities by 9%.

At the other end of the list, cryptocurrencies or wallets are approved by just 1%, while stablecoins, tokenised deposits or tokenised money market funds are also approved by 1%. ESG investments stand at 8%, down from 13% last year, while diversity, equity and inclusion initiatives are approved by 6%.

Bank selection reinforces the same emphasis on trust and risk. Although banks still hold the largest share of US cash and short-term investment holdings at 42%, that share is lower than in recent years. Overall relationship strength is the top determinant when choosing a bank for deposits, cited by 81% of organisations, three percentage points below 2025. Credit quality is cited by 60%.

Counterparty risk has moved up the agenda, cited by 54% of organisations, an 11-point year-on-year rise. Yield or interest rate offered is cited by 51%, compelling deposit rates by 42%, bank asset size by 41%, earnings credit rates by 35% and simplicity of working with the bank by 31%. KYC process and regulatory considerations are each cited by 20%.

Fund selection is more yield-sensitive, but still controlled. AFP says yield is the most important factor in choosing a money market fund, followed by fund ratings and stable net asset value. Over three-quarters (77%) of organisations require rated funds, and 82% prefer S&P as their primary rating agency.

Stablecoins stay on the treasury fringe

Stablecoins and tokenised products are the clearest examples of awareness without adoption in the report. AFP says only 7% of organisations expect the evolution of stablecoins or tokenised products to be extremely or very relevant over the next three years. Twenty-six per cent see them as moderately or slightly relevant, 47% say they will not be relevant, and 20% are unsure.

Regulation remains the main constraint on adoption. AFP says most treasury professionals are likely to stay cautious until the rules are clearer, even though the regulatory framework is beginning to take shape. The report points to the GENIUS Act, passed in July 2025, which introduced a federal framework built around 1:1 reserves and banking-style oversight. Further rules from regulators, including the Office of the Comptroller of the Currency and FinCEN, are expected to be fully implemented by 2027, while tax and accounting guidance is still pending.

“Current liquidity strategies prioritise safety and risk mitigation, leaving stablecoins and tokenised products on the periphery for most treasury teams despite high awareness,” said Tom Hunt, CTP, director of treasury practice at AFP. “But with the passage of the GENIUS Act and additional regulations in development, treasury teams need to build their knowledge now, so they can make informed decisions once the rules are finalised.”

AFP’s comparison of instruments also explains why the products are not interchangeable for treasury purposes. Stablecoins are private digital currencies issued by nonbanks or fintechs, usually without yield, FDIC insurance, or a claim on a bank, with payments as their primary role. Tokenised deposits are bank deposits issued by regulated banks, usually non-yield-bearing, that use permissioned or hybrid blockchain rails and serve as settlement cash. Tokenised money market funds are fund securities issued by asset managers, potentially yield-bearing and positioned around yield and collateral.

Formal adoption remains far behind the debate. The report’s key findings say only 7% are considering including stablecoins in investment policy, while the detailed policy-change table shows 5% adding stablecoin capabilities and 3% adding tokenisation capabilities. Both measures underline the same point: despite market attention, formal treasury adoption is minimal.

Real-time liquidity may have a clearer near-term route into treasury practice. Forty-one per cent of respondents expect the money market industry to provide 24/7 liquidity as real-time payments expand, up from 38% in 2025. Twenty-six per cent do not expect this, and 33% are unsure.

Among policy-compliant options, 86% would choose real-time money market funds, down from 89% last year, and 68% would choose real-time investment sweeps, down from 73%. Real-time earnings credit rates are favoured by 45%, while 24% would select real-time investment options that “follow the sun”, up from 18% in 2025.

Liquidity caution defines the road ahead

The survey points to a cautious but active liquidity environment. Cash levels are rising, portfolios are moving modestly away from bank deposits, and written investment policies are becoming more embedded across larger, public and investment-grade organisations.

Innovation is being judged through the same lens as every other liquidity decision: safety, access, counterparty risk and operational control. Real-time money market funds and investment sweeps appear to have a clearer near-term path into treasury practice than stablecoins, which remain largely outside day-to-day liquidity strategy despite high awareness.

Financial professionals are left with a familiar but demanding task. In a market shaped by tariff uncertainty, geopolitical risk, inflationary pressure, and uncertain rate expectations, they need to preserve flexibility, diversify within safe limits, and keep liquidity close enough to respond quickly as conditions change.