Written by: Iris, CryptMiao

What do you think virtual currencies are: money, commodities, or securities?

Currently, some countries and regions globally are discussing and determining the attributes of virtual currencies.

For example, the United States passed the "Financial Innovation and Technology for the 21st Century Act (FIT for the 21st Century Act)" in 2024, which specifically divides and regulates virtual assets as "commodities" or "securities"; Germany classifies virtual currencies as private money; more countries, such as China and Dubai, have determined virtual assets as property in certain legal cases.

However, as virtual currencies gradually become popular globally, it is time to "unify the measurement standards".

On March 22, 2025, according to Cryptoslate, the International Monetary Fund (IMF) released the seventh edition of the Balance of Payments Manual (BPM7), which for the first time qualifies BTC and similar virtual currencies and incorporates them into the international balance of payments.

This is the first systematic definition of digital asset status in the global financial statistical system by the IMF. Although this classification does not equate to regulatory authorization, its authority is destined to have a profound impact on central banks, finance ministries, tax authorities, and even the crypto industry itself.

However, before discussing the impact, let's first chat with Mankun Lawyer about how authoritative this organization is.

Who is the IMF?

The IMF, or International Monetary Fund, sounds like a "distant" financial organization, but it actually carries significant weight in global financial rules.

To date, the IMF has been established for nearly 80 years, with over 190 member countries. Similar to the FATF we previously introduced, the IMF is not an affiliate of any country, but a "financial advisor + international data officer + debt firefighting team" funded by governments, and an existence that central banks and finance ministries cannot bypass.

The IMF's main responsibilities are three things:

• First, monitor global economic risks. If a country has high external debt, exchange rate issues, or is about to run out of fiscal resources, the IMF will issue a warning;

• Second, provide loans and assistance. If a country's foreign exchange reserves are in crisis, it can apply to the IMF for relief loans;

• Third, and most critically, the focus of our discussion—establish "global economic statistical standards".

You can imagine the IMF as the "chief accountant behind national financial statements". The international balance of payments, capital accounts, and external asset-liability statements we often hear about all depend on the IMF's Balance of Payments Manual.

For individuals, although the IMF does not directly manage you like the SEC or tax authorities, the statistical rules it sets will gradually be transmitted to every specific department responsible for "regulating you":

• National statistical bureaus, how to calculate your assets;

• Finance ministries and foreign exchange authorities, how to monitor your capital flows;

• Tax authorities and regulatory agencies, whether and how to tax you.

Therefore, the seventh edition of the Balance of Payments Manual (BPM7) incorporating BTC and similar virtual currencies into the "statistical scope" is actually sending a very clear signal to the world: virtual currencies are no longer an asset category that can be bypassed in financial reports.

Although this signal may not immediately trigger regulatory implementation, it will definitely be the starting point for "regulation that can take action, has basis, and can be quantified".

Establishment of Regulatory Standards

Now, let's return to the part about virtual assets in the latest edition of the Balance of Payments Manual.

The document states that crypto assets without liability support (such as Bitcoin) should be classified as "non-productive, non-financial capital assets" and separately listed in the "capital account" of the international balance of payments.

If you think the IMF's classification of virtual assets like Bitcoin as "non-monetary" means regulatory relaxation, you might be mistaken. In fact, this classification method is perhaps exactly what global regulatory agencies most welcome.

Why do we say this?

As mentioned at the beginning of the article, many countries or regions have long had disagreements about the classification of virtual assets, which has led to frequent "everyone wants to regulate, but no one knows how to regulate" dilemmas in cross-border and cross-regional supervision. Now, the IMF directly concludes: Bitcoin and similar assets are not money, not debt, but a capital asset you hold, similar to gold, houses, or artworks.

For regulatory agencies of various countries, this classification is perfect. Because it means: these assets are no longer a "gray asset outside the system", but can be incorporated into the country's asset-liability statistical system, which means they can be tracked, reported, and even taxed in the future.

It is also worth noting that BPM7 specifically mentions that stablecoins like USDT and USDC, supported by liabilities, should be classified as "financial instruments". This provides direct reference for stablecoin regulation in various countries, meaning regulation can refer to financial product rules. Moreover, platform tokens like ETH and SOL may be viewed as equity-like tools when held, reflecting their investment attributes.

From this moment, regulation of virtual assets has a handle. And after having a handle, the three most directly affected areas are: reporting, taxation, and capital flow compliance.

Reporting Obligations for Holders

For a long time, Web3 has been anonymous and decentralized. Even if asset data can be viewed on-chain, regulatory departments do not know who holds these virtual assets.

But now, countries have reason to incorporate non-liability crypto assets into the "external capital account" statistics. This means that as a resident of a country, if you control or hold BTC, ETH, DAO assets that are not issued or custodied domestically, or whose issuance and governance entities are located overseas, you may be required to report "external assets" in terms of international payments.

This is just the first layer; more critically, domestic tax authorities are beginning to strengthen information disclosure requirements about "what you hold", regardless of whether the assets are "domestic" or "overseas".

Taking the United States as an example, if you are a tax resident, even if your assets are on a local platform like Coinbase or you control a non-custodial wallet address, you may need to report on Form 8938 if your asset holdings reach a certain amount.

Tax Obligations for Traders

Whether Bitcoin (BTC) is treated as a non-financial capital asset or ETH and SOL are handled as equity-like instruments, they need to be processed as "asset disposal" when disposed of and fulfill tax obligations based on realized profits.

So what traders really need to focus on is: when will tax obligations arise, and how to calculate taxable income?

For example, if you trade one token for another after holding it, and the asset appreciates during the holding period, it may be deemed a capital gain, even if you only conducted a token-to-token exchange without converting to stablecoins or fiat currency.

For instance, Staking, Airdrop, and liquidity provision rewards for some tokens will be included in taxable income at their market value at the time of receipt (ordinary income) in some countries like the United States, regardless of whether you have traded or realized profits.

Additionally, if you are a creator or protocol developer earning tokens, NFT sales income, or protocol fee sharing through on-chain transactions, these may be considered business or other taxable income and included in personal or corporate income tax.

Capital Flow Compliance Challenges

If the entry of virtual assets into accounting has changed the logic of "what is held" and "what is taxable", the final unavoidable question is: where do these assets come from and where are they going.

For a long time, fund flows on the chain have been in a stage of technological advancement and regulatory lag. After fundraising, project parties directly transfer stablecoins to developer wallets, pay salaries, allocate funds, or conduct airdrops through multi-signature addresses, and USDT transfers or BTC payments between users seem to be "moving on the chain" by themselves, without banks, reports, or intermediaries.

In the past, these fund transfer events were understood as "transaction freedom" or "user experience", but under new statistical calibers, they have become "capital account changes" or "financial account receipts and payments", and in some countries, they even trigger the applicable thresholds for foreign exchange and payment compliance. Regulations can be covered using existing policy tools.

For Web3 project parties, if the technical team is located domestically but funds are directly transferred from overseas wallets to the team's wallet, such a structure, once viewed by regulators as "capital inflow" or "capital account inflow", may require explaining the nature of funds, fulfilling reporting obligations, or even facing fund freezing or foreign exchange violations.

For individual investors, receiving stablecoin transfers through non-custodial wallets, then withdrawing, exchanging, or transferring to fiat currency accounts, may also be blocked by trading platform risk control systems due to unclear source paths and complex counterparty identities, or be required to supplement KYC and fund source explanations.

Mankun Lawyer's Summary

It needs to be emphasized that BPM7 is not a regulatory rule. It will not directly determine how much tax you should pay, whether your money can be remitted, or immediately bring KYC, audit, or asset freezing. However, it has quietly transformed virtual assets from "unclear" to "classifiable" at the underlying regulatory logic.

For regulators, this is a technical breakthrough: from "lack of regulatory basis" to "can be incorporated into the system". For the industry, this is a signal: Web3 assets are slowly entering the statistical calibers, policy models, and even enforcement perspectives of mainstream financial systems.

Although the changes behind this will not immediately impact every user, it is worth early structural review and compliance preparation for those who:

• Still adopt the traditional "overseas collection, domestic spending" structure

• Use stablecoins for cross-border transactions

• Hold large amounts of on-chain assets

Especially facing the increasingly strict trends of future on-chain identity identification, on-chain tax interfaces, and cross-border transaction verification, the cost of proactively adapting now is much smaller than passively responding.

We understand that every Web3 practitioner and user is more accustomed to the narrative of "decentralization" and "free circulation". But as BPM7 shows, global regulation is not negating virtual assets, but finding a way to "incorporate them into the rules".

Since the scoring method of this game has begun to change, we at least need to learn to understand the scoreboard.