The US Federal Accounting Standards Advisory Board (FASAB) agency issued a statement stating that seized crypto assets should be treated as “non-monetary property.”
This comes as part of an overall effort to standardize the accounting and reporting of seized and confiscated digital assets.
FASAB, which is responsible for developing and issuing accounting standards for the U.S. government, published a Technical Bulletin (TB) on Friday to clarify these standards. The bulletin emphasized that cryptocurrencies “typically do not have all the characteristics of monetary assets” and are “not effective as a unit of accounting, medium of exchange, or store of value.”
The bulletin also notes that central bank digital currencies (CBDCs) “are typically recognized as official digital forms of government-backed money that serve essentially the same purposes as physical cash.” Therefore, reporting entities should treat CBDCs as monetary instruments, according to the published document.
On the other hand, according to FASAB, all other digital assets, including cryptoassets, cryptocurrencies, stablecoins, non-fungible tokens (NFTs), security tokens, and privacy coins, should be considered non-monetary property.
The bulletin explains that, with the exception of CBDCs, digital assets “are not considered fiat” and “typically do not have all the characteristics of monetary assets.”
“Cryptoassets are not an effective means of exchange because there are no institutions that accept them as a form of payment, and cryptoassets do not have the same features that give fiat money their power and legitimacy, such as being backed by the institutions and legal system of a sovereign nation,” the bulletin says.
He also adds that cryptoassets do not represent the stable store of value necessary to effectively serve as money, due to significant market value fluctuations.
The Bulletin advises reporting entities to determine the market value of seized and foreclosed digital assets using “a publicly observable active market for a particular digital asset.”
*This is not investment advice.