The Organization for Economic Co-operation and Development (OECD) on Monday submitted a framework to increase international transparency in crypto to the G20.
Twenty participating member countries make up the G20, including China, India, South Korea, Brazil, the U.S., the United Kingdom, and the European Union, to name a few. Back in April 2021, the G20 tasked the OECD with developing a method for automating cryptocurrency tax reporting between nations.
G20 Finance Ministers and Central Bank Governors will review the 100-page Crypto-Asset Reporting Framework (CARF)âalong with suggested amendments to the groupâs Common Reporting Standard (CRS)âat their next meeting, which will occur this Wednesday and Thursday in Washington, D.C.
The OECD first passed the CARF in August, a report that the group calls a âtransparency initiativeâ for crypto. Among other things, it defines what âcrypto assetsâ and NFTs are, offers a plan for automatic international crypto tax reporting, and includes provisions for cryptocurrency derivatives trading.Â
According to a statement, the OECD said that cryptocurrencies are not currently covered by the CRS, which was designed to prevent international tax evasion.Â
The OECD argued that because crypto is not covered under the current standard, there is a âlikelihood of their use for tax evasion while undermining the progress made in tax transparency through the adoption of the CRS.â
The OECDâs proposed amendments to the CRS also include the addition and definition of Central Bank Digital Currencies (CBDCs).
While the framework will likely affect many countries, the U.S. may be an exception. In a blog post, Coinbase stated it believes the CARF and CRS will be applied to all nations except for the U.S. because the U.S. will create its own crypto tax regulations from the Infrastructure Investment and Jobs Act.
Altogether, the proposed framework and amended standards may mean the beginning of the end of the Wild West of cryptocurrency and the varied patchwork of international regulations.
World leaders are recognizing that crypto is a trillion-dollar industry and that some illicit traders may abuse cryptoâs permissionless and sometimes pseudonymous nature to evade sanctions, taxes, or engage in other illicit activity.Â
These and subsequent moves by the OECD and G20 may make life a little harder for plane-hopping crypto moguls like Terraâs Do Kwonâwhoâs now on Interpolâs red notice listâor Michael Saylor, whoâs now being sued by the U.S. Attorney General for alleged tax fraud.
