Virtual Asset

Virtual Asset is the official term defined by the Financial Action Task Force as a digital representation of value that can be digitally traded, transferred, or used for payment or investment purposes, excluding digital representations of fiat currencies, securities, and other financial assets already covered by FATF Recommendations.

FATF's October 2018 definition established virtual assets as the regulatory classification for cryptocurrencies, utility tokens, stablecoins not qualifying as e-money, NFTs when used for payment or investment, and other blockchain-based digital value representations. The term intentionally uses technology-neutral language to encompass evolving forms of digital value beyond specific implementations like Bitcoin or Ethereum.

The virtual asset classification triggers comprehensive AML/CFT obligations under FATF Recommendation 15, requiring countries to regulate Virtual Asset Service Providers with requirements equivalent to traditional financial institutions including licensing, customer due diligence, transaction monitoring, suspicious activity reporting, and Travel Rule compliance for cross-border transfers. The FATF definition influences national and regional regulatory frameworks including MiCA's "crypto-asset" terminology, FinCEN's MSB rules for convertible virtual currencies, and ESMA's supervisory approach. Exclusions from the virtual asset definition include central bank digital currencies, closed-loop gaming currencies, and loyalty points without secondary market tradability. The virtual asset framework represents global consensus on applying financial crime prevention standards to cryptocurrency activities.