G20 leaders backed a declaration that has implications for cross-border crypto rules.
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Leaders of the Group of 20 nations agreed to give global tax authorities greater insight into cryptocurrency transactions, a sign of emerging international cooperation on crypto—even if it takes years to implement.
Rules covering crypto were included in a wide-ranging declaration backed by leaders at the G20 summit in India over the weekend, though—as investors should be used to by now—it may be four years before meaningful crypto tax reforms take effect. Nevertheless, consensus on tracking crypto globally could eventually put an end to the days of using crypto to dodge taxes.
“We continue to closely monitor the risks of the fast-paced developments in the crypto-asset ecosystem,” the G20 declaration read, backing the Financial Stability Board’s latest high-level recommendations for the regulation, supervision, and oversight of crypto markets and stablecoins.
Recommendations made in July by the FSB—a G20 body that monitors the financial system—include crypto platforms segregating client funds, separating business functions to avoid conflicts of interest, and regulating stablecoin issuers like banks.
The G20 declaration called for the swift implementation of measures suggested last year by the Organization for Economic Cooperation and Development. That includes the Crypto Asset Reporting Framework, or CARF, which has measures for global tax authorities to share information on crypto transactions between exchanges and wallets in a bid for more holistic tax coverage of digital assets.
The G20 tasked the Global Forum on Transparency and Exchange of Information for Tax Purposes “to identify an appropriate and coordinated timeline to commence exchanges,” noting the aspiration to start CARF crypto tax exchanges by 2027.
While global crypto rules remain nebulous and slow to form, the ability of the G20 to reach consensus on frameworks is an encouraging sign that regulatory progress is possible. While the European Union earlier this year passed sweeping new crypto regulations, progress remains slow in the U.S., where it increasingly looks like Congress won’t pass crypto laws this year.
Write to Jack Denton at [email protected]
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