G20 Leaders Push for Global Crypto Reporting Framework
Leaders representing the world’s 20 largest economies, collectively known as the G20, are advocating for the swift implementation of a cross-border framework for regulating cryptocurrency assets. Reports from the G20 summit in New Delhi reveal that this framework aims to enable the exchange of information regarding cryptocurrency transactions between different countries, with the process slated to commence in 2027.
In a consensus declaration signed by G20 leaders, the group calls for the rapid implementation of the Crypto-Asset Reporting Framework (CARF) and amendments to the Common Reporting Standard (CRS). The Global Forum on Transparency and Exchange of Information for Tax Purposes has been tasked with coordinating an appropriate timeline for these exchanges between relevant jurisdictions.
This forthcoming framework is poised to have a significant impact on multiple countries, including Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, and the United States, as well as the European Union. Remarkably, two-thirds of the world’s population resides in a G20 member country.
The Crypto-Asset Reporting Framework was initially introduced by the Organization for Economic Cooperation and Development (OECD) in October 2022. Its primary objective is to provide tax authorities with enhanced visibility into cryptocurrency transactions and the individuals associated with them.
Under the proposed framework, participating nations will automatically share information regarding cryptocurrency transactions between their jurisdictions on an annual basis. This will encompass transactions conducted on unregulated cryptocurrency exchanges and wallet service providers. Notably, many countries have already introduced new disclosure standards for cryptocurrency transactions. In May, the European Union adopted updated rules aligned with the CARF, outlining procedures for the automatic sharing of information among European governments for tax purposes. These rules stipulate that the transfer of digital assets must include details such as the beneficiary’s name, distributed ledger address, and account number.
Additionally, the G20 leaders expressed their endorsement of recommendations put forth by the Financial Stability Board concerning the regulation, supervision, and oversight of crypto-asset activities and markets, as well as global stablecoin arrangements. These recommendations, published in July, advocate for standards for stablecoins that are akin to those applied to traditional commercial banks. They also call on regulators to proactively prevent any activities that obstruct the identification of involved participants, among other key guidelines.
As the G20 moves towards establishing this international framework for cryptocurrencies, it is poised to shape the future of crypto regulation and information exchange on a global scale.