G20 Forges Ahead with Global Crypto Framework
Leaders of the G20 nations are accelerating the implementation of a cross-border framework for crypto assets. Gathered in New Delhi for a two-day summit, the group has reached a consensus that aims to facilitate information exchange between countries starting in 2027.
New Norms and Recommendations
This new momentum comes under the G20 Presidency of India. Besides advocating for increased global coordination, the summit has endorsed recommendations from the Financial Stability Board (FSB) for regulating, supervising, and overseeing crypto-assets and global stablecoin arrangements. These recommendations aim to bring cryptocurrencies under a regulatory umbrella-like traditional banking.
Crypto-Asset Reporting Framework (CARF)
Initially introduced by the Organization for Economic Cooperation and Development (OECD) in October 2022, the Crypto-Asset Reporting Framework (CARF) will serve as a cornerstone of the new initiative. CARF aims to give tax authorities more visibility into cryptocurrency transactions and their beneficiaries.
Under this framework, countries will automatically share information on crypto transactions. Hence, this move aims to cover even transactions occurring on unregulated crypto exchanges and wallet providers. Consequently, two-thirds of the world’s population residing in G20 countries will experience the implications of these regulatory changes.
EU Leads the Way in Disclosure Standards
Prior to this G20 consensus, the European Union had already paved the way by approving updated rules in May. These rules align with the CARF, facilitating automated information sharing between European governments. Significantly, each transfer of digital assets must now include details such as the name and account number of the beneficiary, as well as their distributed ledger address.
Moreover, Finance Ministers and Central Bank Governors will discuss further steps at their meeting in October 2023. The IMF and FSB also work together to contour the regulatory framework for a globally coordinated approach to crypto assets.
According to the New Delhi G20 Declaration, G20 countries will continue closely monitoring the fast-paced developments in the crypto ecosystem to identify and mitigate risks.
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