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OECD proposes a framework for reporting crypto transactions
United States, South Korea, Japan and many other European countries are expected to profit under the CARF
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The Organization for Economic Cooperation and Development (OECD) published a global framework for reporting crypto transactions on Monday. The OECD announced on October 10 that it would present the Crypto-Asset Reporting Framework or CARF. It will be presented to a meeting of G20 finance ministers and central bank governors on October 12-13.
This would allow countries to monitor the cross-border transfer of crypto assets. The framework was reportedly approved in August. It ensures the collection and automatic exchange of information on transactions for relevant crypto. According to the report, crypto assets include assets that can be held and transferred in a decentralised manner, without the intervention of traditional financial intermediaries. These include stablecoins, derivatives issued in the form of a crypto-asset, and certain non-fungible tokens.
OECD said in a public statement, "The Crypto-Asset Reporting Framework (CARF) responds to a G20 request that the OECD develop a framework for the automatic exchange of information between countries on crypto-assets. The CARF will be presented to G20 Finance Ministers and Central Bank Governors for discussion at their next meeting on 12-13 October in Washington D.C, as part of the latest OECD Secretary-General’s Tax Report."
The CARF includes model rules that can be incorporated into domestic legislation as well as commentary. It aims to assist administrations with broader crypto implementation. Over the coming months, the OECD will advance work on legal and operational instruments to facilitate the international exchange of information gathered on the basis of the CARF. It will also work to ensure its effective and widespread implementation. This is expected to include the timing for starting crypto exchanges under the CARF.
The CARF will reportedly target any digital representation of value that validates and secures transactions using a cryptographically secure distributed ledger. It will take the same steps if any other similar technology is found. Entities or individuals who provide services facilitating crypto-asset exchange transactions for or on behalf of customers would be required to report under the CARF.
It is worth noting here that CARF was created in response to the rapid growth of the crypto industry. Last year, the industry's market capitalisation increased from $715 billion in January to nearly $3 trillion before plummeting this year. Furthermore, it follows recent changes in the Financial Action Task Force's global anti-money laundering standards.
According to OECD secretary-general Mathias Cormann, "Today’s presentation of the new crypto-asset reporting framework and amendments to the Common Reporting Standard will ensure that the tax transparency architecture remains up-to-date and effective."
The framework will most likely facilitate information sharing on crypto transactions among the OECD's 38 member countries if it is approved as planned. The member countries include the United States, Japan, South Korea, and a number of European countries.
The writer is the founder at yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash
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