One explanation for this deliberately broad terminology is that lawmakers are attempting to maximise regulatory coverage over a still-evolving asset class. Global financial institutions, governments and regulators often use these expressions as umbrella terms to identify the assets, activities and intermediaries they seek to regulate.^[1] The objective may differ: some frameworks aim to support innovation and market development, while others focus primarily on preventing money laundering, terrorist financing and other illicit uses. The terminology also varies across jurisdictions: the United States commonly uses “digital assets,” Singapore uses “digital payment tokens,” the European Union uses “crypto-assets,” and India uses “virtual digital assets.”

It is therefore important to read any definition in light of the policy objective behind it. A tax statute may define digital assets differently from an anti-money laundering law, a consumer-protection regime or a securities framework.

Defining Digital Assets for India – A Comparative Study

In India, the Income-tax Act, 1961, as amended by the Finance Act, 2022, defines this asset class as “virtual digital assets” (VDAs). The definition primarily covers: (a) any information, code, number or token generated through cryptographic or other means, other than Indian or foreign currency; (b) a digital representation of value that can be exchanged, with or without consideration; (c) an asset that promises or represents value, functions as a store of value, or serves as a unit of account; and (d) an asset that can be transferred, stored or traded electronically. The definition also includes non-fungible tokens (NFTs) and allows the Central Government to notify additional digital assets for inclusion.^[3]

The definition was further expanded in the Income-tax Bill/Act, 2025 framework by carrying forward the VDA concept and expressly capturing crypto-assets that use cryptographically secured distributed ledger technology or similar technology. [4][5] In effect, even if a particular crypto-asset does not neatly fit within the earlier wording, it may still fall within the VDA framework if it has two core characteristics: a digital representation of value and reliance on cryptographically secured distributed ledger technology or a similar system. [6]

Singapore’s Payment Services Act similarly defines a “digital payment token” broadly as a unit that is not denominated in, and is not pegged by its issuer to, any currency; is designed to be fungible; is or is intended to be a medium of exchange accepted by the public or a section of the public; and can be transferred, stored or traded electronically.^[7] The European Union’s Markets in Crypto-Assets Regulation (MiCA) defines a “crypto-asset” as a digital representation of value or rights that can be transferred and stored electronically using distributed ledger technology or similar technology.^[8] MiCA then applies different regulatory treatment to three broad categories: crypto-assets other than asset-referenced tokens or e-money tokens, asset-referenced tokens, and e-money tokens.

In the United States, digital assets are not governed by a single comprehensive definition across all federal law. Instead, different regulators classify particular assets by function and legal character. The GENIUS Act, 2025, for example, creates a federal framework for payment stablecoins and defines them as digital assets designed for payment or settlement and redeemable at a predetermined fixed monetary value.^[9] More broadly, crypto-assets may be treated as commodities, securities, money transmission instruments or payment products depending on their structure and use, bringing them within the jurisdiction of the CFTC^[10], SEC^[11] and FinCEN^[12], among others.

Need for a Global Definition for Digital Assets

Although regional and national crypto-asset regulation has made progress, the absence of global definitional consensus remains a serious challenge. Economists, international organisations and financial regulators continue to differ on which assets should be treated as crypto-assets and how they should be classified. This creates particular difficulty for cross-border transactions, where the same token may be treated differently across jurisdictions.

Because many of these assets operate on distributed ledger or blockchain-based networks, they are inherently transnational. The very features that make them attractive, i.e. speed, programmability, privacy and borderless transferability, also create regulatory vulnerabilities. High levels of pseudonymity, combined with inconsistent legal treatment across jurisdictions, can enable regulatory arbitrage and attract illicit actors.

International efforts are increasingly focused on closing this gap. The World Economic Forum identifies the lack of a standardised taxonomy and classification system as a primary obstacle to a global regulatory approach.^[13] The IMF’s 2022 guidance note proposed approaches for standard global classification and urged countries to share regulatory data and statistics to support convergence.^[14] FATF’s extension of the traditional finance “Travel Rule” to virtual assets, requiring collection and transmission of originator and beneficiary information for qualifying transfers, was also a significant step toward international consistency, although FATF’s 2024 update found that implementation and enforcement remain uneven across jurisdictions.^[15]

Why does the Definition of Digital Assets Matters

For businesses, investors and policymakers, the definitional question is not merely academic. It determines whether a digital asset is taxed, whether an intermediary must be licensed, whether consumer-protection rules apply, and whether anti-money laundering obligations are triggered. A globally coherent taxonomy would make compliance easier, reduce regulatory arbitrage, and help distinguish genuinely innovative use cases from high-risk or illicit activity.

Lack of Digital Assets’ Definition Creates Structural Vulnerability

The regulation of digital assets is, at its core, a problem of language before it becomes a problem of law. As this study shows, the lack of a universally accepted definition for crypto-assets creates a structural vulnerability in the global financial system. India’s broadening VDA framework reflects a shift toward regulating assets based on their functional and technological characteristics rather than their labels. This approach is broadly consistent with emerging global models, but it is not enough on its own. Until meaningful consensus is achieved in both principle and practice, regulatory arbitrage is likely to continue. To promote responsible innovation while preventing illicit use, policymakers must move toward a common global taxonomy for digital assets—one that is technologically neutral, risk-sensitive and capable of adapting to future developments.