During the G20 summit held under India’s presidency in New Delhi, the member countries comprising the G20, representing the world’s 20 largest economies, have made significant strides towards establishing a framework for global cryptocurrency asset reporting. This framework, known as the Crypto-Asset Reporting Framework (CARF), aims to enhance transparency and accountability in the cryptocurrency space.
Purpose of the Framework
1. Crypto-Asset Reporting Framework (CARF): The CARF has been designed to provide greater visibility into cryptocurrency transactions and their participants. This move is seen as a critical step in addressing concerns related to financial crimes, tax evasion, and money laundering in the cryptocurrency sector.
2. Amendments to CRS (Common Reporting Standard): Alongside CARF, the G20 has called for improvements and standardization in reporting practices for cryptocurrency transactions. This is expected to facilitate more effective cross-border cooperation and data sharing among member countries.
Involvement of Major Economies
Prominent nations such as the United States, United Kingdom, China, India, and others, which collectively account for two-thirds of the global population, are actively participating in this initiative. Their collaboration signals a collective commitment to addressing the challenges posed by the rapidly evolving cryptocurrency landscape.
How the Framework Works
1. Annual Information Exchange: Under the framework, member countries will engage in annual data exchange on cryptocurrency transactions. This exchange will enable them to monitor and track crypto-related activities within their jurisdictions more effectively.
2. Scope: The reporting scope extends to encompass transactions conducted on unregulated cryptocurrency exchanges and wallet providers, enhancing oversight over the entire cryptocurrency ecosystem.
Information Shared
For each cryptocurrency transaction, the following information will be shared among member countries:
- – Beneficiary name
- – Beneficiary’s digital ledger address
- – Beneficiary’s account number
This move represents a significant step towards greater transparency and regulatory cooperation in the global cryptocurrency market. As the framework takes shape, it is expected to have far-reaching implications for the regulation and oversight of cryptocurrencies on the international stage. Starting from 2027, participating countries will commence the exchange of information, marking a pivotal moment in the evolving landscape of cryptocurrency regulation.
