FASAB declares seized crypto assets as nonmonetary property while central bank digital currencies (CBDCs) are treated as monetary instruments, citing the lack of typical monetary characteristics in cryptocurrencies.
Bollywood Fever: The Federal Accounting Standards Advisory Board (FASAB) has clarified that seized crypto assets should be treated as “nonmonetary property,” while central bank digital currencies (CBDCs) should be treated as monetary instruments. The federal authority claims that cryptocurrencies “do not typically possess all monetary characteristics,” emphasizing that they “are not effective as a unit of account, medium of exchange, or store of value.”
Accounting Standards for Seized Crypto
The Federal Accounting Standards Advisory Board (FASAB) published a Technical Bulletin (TB) on Friday to clarify the standards for the accounting and reporting of seized and forfeited digital assets. FASAB is responsible for developing and promulgating accounting standards for the U.S. government.
Emphasizing that central bank digital currencies (CBDCs) are “typically considered official digital forms of government-backed money that essentially serve the same purposes as physical cash,” the bulletin specifies:
“Reporting entities should treat central bank digital currencies as monetary instruments and treat all other digital assets as nonmonetary property.”
All other digital assets include crypto assets, cryptocurrencies, stablecoins, non-fungible tokens (NFTs), security tokens, and privacy coins, the FASAB detailed.
The bulletin explains that except for central bank digital currencies, digital assets “are not considered fiat money” and “do not typically possess all monetary characteristics,” elaborating:
“They are not effective as a unit of account, medium of exchange, or store of value.”
“Crypto assets are not an effective medium of exchange due to the lack of entities that accept them as a form of payment and because crypto assets do not possess the same characteristics that give fiat money strength and legitimacy, such as backing by a sovereign nation’s institutions and legal system,” the bulletin elaborates, adding:
“Crypto assets do not typically represent a stable store of value, which is required to serve effectively as money, due to their substantial market value volatility.”
The bulletin further advises reporting entities to determine the market value of seized and forfeited digital assets using “a publicly observable active market for the specific digital asset,” noting that management should exercise judgment in selecting the most appropriate market for valuation.
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