The U.S. Federal Accounting Standards Advisory Board (FASAB) has issued a technical bulletin clarifying how federal reporting entities should account for seized and forfeited digital assets. The core takeaway is straightforward: central bank digital currencies (CBDCs) are to be treated as monetary instruments, while all other digital assets are to be reported as nonmonetary property.
The clarification matters because FASAB is the body responsible for developing and issuing accounting standards for the U.S. government. By drawing a formal distinction between CBDCs and the broader digital asset market, the bulletin gives federal entities a more defined framework for reporting crypto-related seizures and forfeitures.
CBDCs Separated From the Rest of the Digital Asset Market
In the bulletin, FASAB describes CBDCs as official digital forms of government-backed money that generally serve the same purpose as physical cash. On that basis, the board said reporting entities should classify them as monetary instruments. By contrast, digital assets outside that category do not receive the same treatment.
FASAB stated that all other digital assets should be handled as nonmonetary property. The scope of that category is broad and includes crypto assets, cryptocurrencies, stablecoins, non-fungible tokens (NFTs), security tokens, and privacy coins. This means that even widely traded or payment-oriented tokens are not being treated as monetary instruments for federal accounting purposes unless they qualify as a CBDC.
The board’s position rests on its view that, except for CBDCs, digital assets are not fiat money and generally do not display all the characteristics associated with money. In particular, the bulletin argues that they are not effective as a unit of account, medium of exchange, or store of value.
Why FASAB Says Crypto Does Not Qualify as Money
FASAB’s bulletin lays out the reasoning behind its classification. According to the board, crypto assets are not an effective medium of exchange because the number of entities willing to accept them for payment remains limited. The bulletin also emphasizes that crypto lacks the institutional backing that supports sovereign currency, including the legal and governmental framework that gives fiat money legitimacy and strength.
The board also highlighted volatility as a key issue. It said crypto assets do not typically represent a stable store of value, which is an important requirement for something to function effectively as money. That view aligns with a long-running debate in financial regulation and accounting over whether highly volatile digital assets should be treated more like commodities, investment property, or cash-like instruments.
By choosing the nonmonetary property approach, FASAB is effectively signaling that the federal government should not treat seized crypto in the same way it would treat cash balances or equivalent monetary claims. Instead, those assets are to be recognized and reported more like property holdings whose value must be measured and disclosed appropriately.
Implications for Seized and Forfeited Digital Assets
The bulletin specifically addresses seized and forfeited digital assets, an area of growing practical importance as law enforcement agencies encounter more crypto in criminal, civil, and regulatory cases. Federal entities responsible for holding such assets now have clearer guidance on how those holdings should appear in government financial reporting.
This distinction may affect how agencies present asset balances, describe their nature, and evaluate changes in value over time. While the bulletin does not redefine the legal status of cryptocurrencies in a broader policy sense, it does establish a clear accounting treatment for federal reporting purposes. In other words, the guidance is about how the government should record and disclose seized digital assets, not about recognizing crypto as money in a general economic sense.
The classification also reinforces a broader institutional view: digital assets may be economically significant and actively traded, but that does not automatically make them monetary instruments within public-sector accounting frameworks. For agencies that manage seized wallets or token holdings, this clarification reduces ambiguity and provides a more consistent reporting basis.
Valuation Must Be Based on Observable Active Markets
FASAB also addressed valuation. The bulletin 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. That instruction is important because pricing in digital asset markets can differ across venues, and liquidity can vary widely depending on the token involved.
The board noted that management should use judgment in selecting the most appropriate market for valuation. This suggests that agencies cannot rely on arbitrary or opaque pricing references. Instead, they are expected to ground their reported values in observable market data and choose valuation sources that best reflect the asset in question.
That approach is especially relevant for assets such as NFTs, thinly traded tokens, or privacy-focused coins, where price discovery may be less straightforward than for major cryptocurrencies. Even so, the bulletin does not create a separate valuation model for each type of token; rather, it establishes the principle that valuation should be tied to an active and publicly observable market whenever possible.
A Narrow Accounting Decision With Broader Significance
Although the bulletin is technical in nature, it carries broader significance for how the U.S. government conceptually separates sovereign digital money from the wider crypto ecosystem. The decision to treat CBDCs as monetary instruments while categorizing all other digital assets as nonmonetary property draws a bright line between state-backed digital currency and privately issued or decentralized digital tokens.
That distinction could shape future discussions around reporting standards, asset classification, and public-sector treatment of digital holdings. It also reflects an official skepticism toward the idea that cryptocurrencies, despite their scale and visibility, currently perform the full economic role of money.
For now, the immediate outcome is practical: federal entities have clearer rules for recognizing, classifying, and valuing seized crypto. As digital asset seizures continue to arise in enforcement actions, this accounting guidance gives agencies a more standardized framework for financial reporting.