Definition of digital asset

Section 7701 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (51) Digital asset (A) In general Subject to subparagraph (B) and except as otherwise provided by the Secretary, the term digital asset means any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary. (B) Financial assets (i) In general Except as otherwise provided by the Secretary, in the case of any digital asset which is a representation of a financial asset which is itself not a digital asset, such asset— (I) shall not be treated as a digital asset, and (II) for purposes of this title, and except as otherwise provided by law, shall be treated as such financial asset. (ii) Definition For purposes of this subparagraph, as specified by the Secretary, the term financial asset means an asset that trades on established markets or which is used as a medium of exchange, store of value, or unit of account, and shall exclude a payment stablecoin (as defined in section 1091(a)(3)). (C) Representations of other property For purposes of this paragraph, as specified by the Secretary pursuant to regulation, in the case of a digital asset which is a representation of property other than a financial asset, such digital asset shall be treated in the same manner as the property which it represents. (52) Actively traded digital asset Except as otherwise provided by the Secretary, the term actively traded digital asset means a fungible digital asset for which quotations are readily available on a digital asset exchange..