October 11, 2022
Cross-border regulation for crypto could soon become a reality as the G20 is set to review a new transparency framework for digital assets this week.
On October 10, the Organisation for Economic Co-operation and Development (OECD) delivered a global tax transparency framework for reporting and exchanging information regarding crypto-assets. The framework applies to entities and individuals that facilitate crypto transactions, although it is currently unclear whether the same will be applied to individual transfers between self-hosted wallets.
The initiative comes in response to a request from the G20 – a group of 20 countries that includes the U.S., India, China, South Korea and the U.K. Earlier this year, the OECD was tasked with creating a framework to ensure tax transparency across borders with respect to cryptocurrencies.
The Crypto-Asset Reporting Framework (CARF) will be presented to G20 finance ministers and central bank governors for review during their next meeting on Oct. 12 and Oct. 13 in Washington D.C.
According to the OECD, the CARF will ensure the transparency of crypto-asset transactions, through automatically exchanging information with the jurisdictions of residence of taxpayers on an annual basis, in a standardised manner similar to the Common Reporting Standards (CRS).
“The CARF will target any digital representation of value that relies on a cryptographically secured distributed ledger or a similar technology to validate and secure transactions,” said the OECD.
The OECD has also proposed to amend the existing CRS to include Central Bank Digital Currencies (CBDCs) that are quickly becoming a part of several countries’ monetary strategy. Data from CBDC Tracker shows that several countries have already begun researching CBDCs, with some having already launched a pilot test with their citizens.