July 15, 2024

G20 Leaders Call for Swift Implementation of Cross-Border Crypto Asset Reporting Framework

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Leaders representing the 20 largest economies in the world, collectively known as the G20, are rallying for the expeditious adoption of a cross-border framework for crypto assets. Reports emerging from the ongoing two-day G20 summit in New Delhi reveal that this framework is expected to facilitate the exchange of information between countries starting in 2027.

A consensus declaration, signed by G20 leaders, urged the prompt implementation of the Crypto-Asset Reporting Framework (CARF) and the necessary amendments to the Common Reporting Standard (CRS). The declaration also called upon the Global Forum on Transparency and Exchange of Information for Tax Purposes to establish an appropriate and coordinated timeline for the commencement of exchanges among relevant jurisdictions.

The forthcoming framework is set to impact numerous 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, in addition to the European Union. Notably, 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 enhance the visibility of crypto transactions for tax authorities, along with the individuals involved in these transactions. Under this proposed framework, countries will automatically share information on crypto transactions between jurisdictions on an annual basis. This exchange will encompass transactions conducted on unregulated crypto exchanges and wallet providers.

Many countries have already imposed new disclosure standards on crypto transactions. In May, the European Union adopted revised regulations to align with CARF guidelines. These rules establish procedures for the automatic sharing of information among European governments for tax purposes. Notably, these regulations mandate that the transfer of digital assets must include details such as the recipient’s name, distributed ledger address, and account number.

Furthermore, the G20 leaders have endorsed recommendations from the Financial Stability Board pertaining to the regulation, supervision, and oversight of crypto asset activities and markets, as well as global stablecoin arrangements. Released in July, these recommendations advocate for consistent standards for stablecoins, placing them on par with commercial banks. Regulators are also encouraged to prohibit any activities that obstruct the identification of involved participants, among other key provisions.

The G20’s collective push for a cross-border crypto asset reporting framework signifies the increasing recognition of the crypto industry within the global financial landscape. As international efforts intensify to regulate and standardize the crypto sector, these developments will likely have far-reaching implications for both the industry and its participants.

Digital Assets Desk

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