Due to the ever-changing nature of cryptocurrency technology, it is always subject to regulatory revisions around the world. The G20 group of 20 developed economies has chosen to adopt a unified approach to design a comprehensive cryptocurrency rulebook to address this issue.
At the G20 summit in New Delhi, global leaders agreed to establish a comprehensive cryptocurrency framework. To expand digital asset transparency, the approved consensus statement includes information sharing between countries.
The consensus declaration signed by G20 leaders is as follows:
We call for the swift implementation of the Crypto-Asset Reporting Framework (CARF) and CRS Amendments [Common Reporting Standard]. We ask the Global Forum on Tax Information Transparency and Exchange to determine an appropriate and coordinated timetable for relevant jurisdictions to begin exchange,
G20 asks to share deal details
The G20 presidency has stepped up support for global coordination, including the Financial Stability Board (FSB), to oversee the issuance of digital crypto assets and stablecoins. These implementations will allow cryptocurrency companies to operate under the supervision of common financial regulators such as banks.
Under the proposed regulatory framework, cryptocurrency companies will automatically share transaction details with jurisdictions on an annual basis. According to reports, the regulation will take effect in 2027. Notably, it also covers unregistered cryptocurrency platforms and wallet providers whose data was compromised.
The G20 declaration document urges rapid implementation of the Crypto-Asset Reporting Framework (CARF) and Common Reporting Standard (CRS) to increase global transparency in the taxation of cryptocurrency exchanges. Additionally, the proposed rules will help financial regulators track illegal transactions to prevent money laundering and other financial crimes.
CARF was originally initiated to disclose valuable transaction details to tax authorities. The Organization for Economic Co-operation and Development (OECD) first launched CARF in October 2022 for taxation purposes.
Notably, the European Union updated its cryptocurrency rulebook in May to add CARF. Any transactions conducted on crypto platforms must disclose details between European countries, including usernames, account numbers and blockchain addresses.
The G20 Presidency will formulate unified regulations
Nonetheless, central bankers and finance ministers from G20 countries will further negotiate the remaining procedures in October 2023. The International Monetary Fund (IMF) and FSB will work together to pave the way for a global regulatory framework for the crypto industry.
G20 countries are home to nearly two-thirds of the world’s population, so the framework will mainly affect countries such as Australia, Argentina, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Turkey, the United Kingdom and the United States. Countries such as South Korea, Saudi Arabia, Mexico and the European Union also fall into the same category.
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