The International Monetary Fund (IMF) has updated its balance of payments standards to account for the rising influence of digital assets.

In its latest seventh edition of the Balance of Payments Manual (BPM7), IMF included cryptocurrencies such as Bitcoin (BTC) in the balance of payments.

The International Monetary Fund (IMF) has updated its balance of payments standards to account for the rising influence of digital assets, marking a significant development in the global economic landscape.

The updates were made in the seventh edition of the Balance of Payments Manual (BPM7), a collaborative effort spanning over 10 years with input from 160 countries. The manual provides a framework for countries to measure and report their economic transactions with the rest of the world.

The new standards, released on March 20, include guidance on how to classify and report transactions in cryptocurrencies, such as Bitcoin (BTC) and ether (ETH), in balance of payments and international investment position statistics.

The updated manual, first announced in May 2023, marks the first time that the IMF has included detailed guidance on digital assets in its global statistical standards.

The updated manual will be applied by individual countries according to their specific needs and the nature of the transactions taking place within their economies.

Non-Productive Assets

The IMF's analysis categorizes crypto assets like Bitcoin, which are not linked to liabilities and serve as a medium of exchange, as non-produced nonfinancial assets and are to be recorded in the capital account.

In practice, this would mean cross-border crypto transactions involving assets like Bitcoin will be tracked as acquisitions or sales of non-produced assets in the capital account.

"The classification of an asset as capital or financial depends on the characteristics of the claims, services, and products associated with the asset. In the case of a bitcoin, it is a non-productive, non-financial asset, and any cross-border transactions in bitcoin would be reported in the capital account as acquisitions less sales of non-produced non-financial assets," the IMF stated.

Meanwhile, tokens tied to a platform, like Ethereum or Solana (SOL), may be treated like equity holdings in the financial account if the owner is from a different country than the token's origin.

For instance, if a UK investor holds Solana tokens from the US, it would be treated like owning foreign stocks, recorded as "equity crypto assets." The IMF highlights that, despite using cryptography, these assets are similar to standard equity when it comes to ownership rights.

"In the case of a Solana token, the holder has a claim on a service enterprise—the Solana foundation—located in the U.S. Despite using cryptography, the rights and services are similar to those arising from the direct holding of, say, U.S. equities by a U.K. resident, which would be reported in the U.K. balance of payments in the financial account," the report stated.

The updated manual also provides guidance on how to report transactions in stablecoins, which are cryptocurrencies pegged to the value of a fiat currency. According to the IMF, stablecoins backed by liabilities, such as BUSD or USDC, would be classified as financial instruments, while those without liabilities, like Dai, would be included in the capital account.

"If the issuer of the stablecoin is in a different country than the holder of the token, they would be included in the financial account, like other financial claims on the rest of the world. For example, if a U.K. resident holds BUSD, issued by a U.S. entity, it would be reported as U.S. liabilities to the U.K. in the financial account," the report explained.

Staking and Crypto Yields

Furthermore, the IMF acknowledges the complexity of staking and crypto yields, noting that rewards from holding tokens could be treated like equity dividends and recorded as income, based on the size and purpose of the holdings.

"For instance, if a U.K. resident is a minor holder of Solana tokens and receives a share of the yield in the period, it would be treated as income in kind, similar to the receipt of dividends from a foreign enterprise," the report stated.

However, if the U.K. resident is a "major" holder or if the rewards are linked to services provided by the investor, they would be included in the financial or capital account, not as income.

The updated manual also includes guidance on how to report transactions in non-fungible tokens (NFTs). According to the IMF, NFTs would be classified as non-produced assets and reported in the capital account.

"The seller would report the transaction as a sale of a non-produced asset, while the buyer would report it as an acquisition of a non-produced asset," the report stated.

Notably, this update helps countries better track the economic impact of digital assets. The IMF now treats activities like mining or staking, which help validate crypto transactions, as services. These will be included in computer services exports and imports.

"The services of specialized units performing these validation tasks would be classified within subcategory 844: Computer and information services. In the case of bitcoin mining, the services would be reported in the capital account," the report stated