US Government Releases Statement on Cryptocurrency Status in the Country
The US government has issued a new statement regarding the status of cryptocurrencies within the country. The Federal Accounting Standards Advisory Board (FASAB) has clarified its position on how seized crypto assets should be treated.
According to the agency, seized cryptocurrency assets should be classified as “non-monetary property” as part of an effort to establish consistent accounting and reporting standards for digital assets that have been seized or confiscated.
FASAB, tasked with developing and issuing accounting standards for the US government, recently published a Technical Bulletin (TB) to provide further clarification on these standards. The bulletin highlights that cryptocurrencies do not possess all the characteristics of monetary assets and are not effective as a unit of accounting, medium of exchange, or store of value.
In contrast, the bulletin states that central bank digital currencies (CBDCs) are recognized as official digital forms of government-backed money and should be treated as monetary instruments by reporting entities.
However, all other digital assets, including cryptoassets, cryptocurrencies, stablecoins, non-fungible tokens (NFTs), security tokens, and privacy coins, are to be considered non-monetary property, according to FASAB’s guidelines.
The bulletin emphasizes that digital assets, apart from CBDCs, are not fiat and lack the essential characteristics of monetary assets. It states that cryptoassets are not an effective means of exchange, do not have the backing of institutions or legal systems, and are subject to significant market value fluctuations, making them an unstable store of value.
Reporting entities are advised to determine the market value of seized and foreclosed digital assets using a publicly observable active market for a specific digital asset.
This update provides clarity on the treatment of cryptocurrencies and digital assets within the US, offering insight into how these assets should be accounted for and reported.