In a new white paper to clarify the characteristics of forfeited digital assets, the Federal Accounting Standards Advisory Board (FASAB) clarified that cryptocurrencies should be treated as “non-monetary property,” unlike digital currencies of the central bank (CBDC).
For the federal agency, “reporting entities must treat central bank digital currencies as monetary instruments and treat all other digital assets as non-monetary property.” These statements are curious since, even though they do not consider it money, the United States Federal Government has a fortune in Bitcoin.
In this way, crypto assets are classified when seized by official United States agencies. Among said digital assets classified as follows: There are cryptocurrencies, stablecoins, non-fungible tokens (NFT), security tokens and privacy coins, detailed the FASAB.
According to the same technical report, CBDCs would have monetary characteristics since they are a form of “official digital money” denominated in the national unit of account of the United States, in addition to a direct liability of the Central Bank, the entity that supports it. .
For the FASAB, CBDCs “essentially serve the same purposes as physical cash.”
Why do stablecoins also have no monetary property?
Although stablecoins such as USDT, issued by the company Tether, They comply with the same monetary characteristics that the FASAB attributes to CBDCs (unit of account based on the dollar, utility as a medium of exchange and reserve of value), the organization insists on not considering them “monetary instruments” just because those They are not issued by a centralized bank.
When it comes to stablecoins, the US organization reduces the demarcation criterion to just one, perhaps to try to replicate its success through its own experiments.
The Board concluded that entities should not declare seized and forfeited stablecoins as monetary instruments because even digital assets pegged to the U.S. dollar or a foreign currency are not fiat money issued and backed by a government entity.
Federal Accounting Standards Advisory Board (FASAB), technical report June 21, 2024.
The modification of the statute of digital assets seized and classified as securities, among which is bitcoin and cryptocurrencies, seems to be motivated by some government entities that have reported concerns regarding the management and market value of this asset class.
Digital assets are unreliable securities
In particular, these entities ensure that the volatility that usually affects these assets makes them listed as unreliable securities, whose market value is imprecise.
According to the same entities, this would turn the official accounting and reporting of assets into a problematic process without clear guidelines. In other words, it would limit agencies’ ability to comply with the standards set by Statement of Federal Financial Accounting Standards 3 (SFFAS 3).
These standards are important because they provide federal accounting guidelines for various types of tangible property owned by US agencies. They include aspects such as the valuation, recognition and management of inventory, materials and supplies, seized property and other assets.
With this measure, the federal government would perhaps be accommodating the procedures and rules to liquidate these seized assets on the market in a way that is easier or more convenient for its interests.
