G20 Calls for Swift Implementation of Global Crypto Asset Framework
Leaders of the G20, the world’s major economies, have come together to urge the rapid implementation of an international framework for regulating crypto assets. This consensus declaration was reached during a recent two-day summit held in New Delhi, where global leaders emphasized the urgent need for cross-border regulations in the crypto space.
The forthcoming international framework aims to facilitate the exchange of information between countries by 2027. The countries impacted by this framework include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States, as well as the European Union. Notably, these G20 nations account for two-thirds of the global population.
The Organization for Economic Cooperation and Development (OECD) is set to introduce the Crypto-Asset Reporting Framework (CARF) in late 2022. This framework’s primary objective is to increase transparency in cryptocurrency transactions and their associated entities, providing tax authorities with valuable information.
Under the proposed framework, member countries will engage in annual automatic exchanges of information regarding cryptocurrency transactions. This includes data from non-regulated crypto exchanges and digital wallet providers.
The G20 leaders have endorsed recommendations from the Financial Stability Board (FSB), which focus on regulating and overseeing crypto asset activities, markets, and global stablecoin arrangements. Released in July, these recommendations suggest that stablecoins should adhere to regulations similar to commercial banks. They also call for the prohibition of any activities that hinder the identification of participants involved.
Several G20 countries have already implemented new disclosure standards for crypto transactions. For instance, in May, the European Union introduced regulations aligned with the CARF, facilitating automatic information sharing between European governments for tax-related purposes. According to these updated EU rules, digital asset transfers must provide details such as the beneficiary’s name, their distributed ledger address, and their account number.
To ensure a balanced perspective, it is worth noting that the International Monetary Fund (IMF) has also recently published a synthesis paper focusing on policymaking for cryptocurrencies.
As the global economy becomes increasingly interconnected, the implementation of an international framework for crypto assets becomes ever more crucial. The G20’s call for rapid action in this regard underscores the need to regulate and oversee the crypto space, ensuring transparency, stability, and the prevention of illicit activities. The forthcoming Crypto-Asset Reporting Framework aims to provide tax authorities with critical information while fostering global cooperation in this evolving digital landscape.
