The Federal Accounting Standards Advisory Board (FASAB), the body responsible for developing accounting standards for the US government, has issued a technical bulletin clarifying how federal reporting entities should account for seized and forfeited digital assets. The guidance draws a clear distinction between central bank digital currencies (CBDCs) and all other forms of digital assets, stating that CBDCs should be treated as monetary instruments, while other digital assets should be recognized as nonmonetary property.
Clear line between CBDCs and other digital assets
In the bulletin, FASAB described CBDCs as official digital forms of government-backed money that generally serve the same essential purposes as physical cash. On that basis, federal reporting entities are instructed to account for CBDCs as monetary instruments. By contrast, the board said that all other digital assets fall outside that category.
The scope of those “other digital assets” is broad. FASAB specifically included crypto assets, cryptocurrencies, stablecoins, non-fungible tokens (NFTs), security tokens, and privacy coins. According to the board, these assets are not considered fiat money and do not usually meet the full set of characteristics associated with money.
Why crypto is not treated as money
FASAB’s rationale is centered on the traditional functions of money. The bulletin states that, except for CBDCs, digital assets are generally not effective as a unit of account, medium of exchange, or store of value. That framing is significant because it places accounting treatment on an economic-function basis rather than on technology alone.
Regarding exchange use, the bulletin argues that crypto assets are not effective mediums of exchange because they are accepted by a limited number of entities as payment and do not carry the same institutional support that underpins sovereign currencies. In particular, the board noted the absence of the sovereign backing, legal framework, and institutional legitimacy that give fiat currency its strength.
On the question of value storage, FASAB highlighted the substantial market volatility associated with crypto assets. In the board’s view, that volatility means crypto does not typically provide the stability expected of money. This point is central to the government’s accounting stance: even if a digital asset can be traded or transferred, that alone does not make it equivalent to cash or a monetary instrument for reporting purposes.
Implications for seized and forfeited assets
The bulletin is specifically aimed at the accounting and reporting of seized and forfeited digital assets held by federal entities. In practice, this means that when US government agencies take control of crypto in enforcement actions, those holdings should not be reported in the same way as cash or cash-like instruments unless they are CBDCs.
Instead, the assets should be treated more like property that has a measurable market value and may later be held, transferred, or disposed of. This distinction matters because classification can affect presentation, valuation, and disclosure in government financial reporting. By formally placing most digital assets into the nonmonetary property category, FASAB is creating a more consistent framework for agencies dealing with seized crypto across different cases and asset types.
How valuation should be determined
Beyond classification, FASAB also addressed valuation. The bulletin says reporting entities should determine the market value of seized and forfeited digital assets using a publicly observable active market for the specific digital asset. At the same time, management is expected to exercise judgment when selecting the most appropriate market for valuation.
This guidance acknowledges a practical challenge in digital asset accounting: prices can vary across trading venues, and some assets may have deeper liquidity or more transparent price discovery in certain markets than others. Rather than prescribing a single venue or data source for all cases, the bulletin leaves room for agencies to identify the market that best reflects fair and supportable valuation for the asset being reported.
That approach could be especially relevant for less liquid tokens, NFTs, or assets traded on fragmented marketplaces. While the bulletin does not introduce a detailed valuation hierarchy in the text provided, it clearly emphasizes the importance of observable market activity and informed management judgment.
A cautious official view of digital assets
FASAB’s position also offers insight into how US federal accounting authorities view the broader nature of digital assets. The bulletin does not deny that crypto assets can have market value or be transferred in economic transactions. However, it stops short of recognizing them as money in the accounting sense, except in the case of CBDCs.
That distinction reflects a conservative institutional perspective. In this framework, most digital assets are better understood as property with market-determined value rather than as instruments that fulfill the core economic functions of sovereign money. For agencies holding seized crypto, the result is a clearer reporting rule. For the wider market, the bulletin is another reminder that official classification of crypto can differ sharply from how participants in the digital asset industry describe these instruments.
Overall, the technical bulletin gives US government entities a more explicit accounting standard for handling digital assets obtained through seizure and forfeiture. The key message is straightforward: CBDCs are monetary instruments, while other digital assets should be reported as nonmonetary property. That clarification may help standardize federal reporting and reduce ambiguity in how seized crypto is recognized on government books.