Generally, a U.S. person who has a financial interest in, or signature or other authority over, any foreign financial accounts, including bank, securities, or other types of financial .accounts (“reportable accounts”) in a foreign country, must file an FBAR with the FinCEN if the aggregate value of those foreign financial accounts exceeds $10,000 at any time during the calendar year. (31 CFR §1010.350(a))
Virtual currency is a digital representation of value that functions as a medium of exchange, a unit of account, and/or a store of value. It can sometimes operate like “real” currency, i.e., the coin and paper money of the U.S. or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance. However, virtual currency doesn't have legal tender status in any jurisdiction. (Rev Rul 2019-24, 2019-44 IRB 1004)
According to FinCEN's Notice, the current FBAR regulations don't recognize a foreign account holding virtual currency as a type of reportable account. Since the FBAR regulations don't consider a foreign account holding virtual currency as a "reportable account," a taxpayer is not required to file an FBAR reporting that account (unless the account holds assets besides virtual currency).
However, Fincen announced that it intends to propose to amend the regulations implementing the bank secrecy act (bsa) regarding reports of foreign financial accounts (FBAR) to include Virtual Currency as a type of reportable account under 31 CFR 1010.350.
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