G20 Advances Global Framework for Cryptocurrency Regulation.

Leaders representing the world’s 20 largest economies, collectively known as the G20, have announced their commitment to expediting the establishment of a comprehensive cross-border framework for regulating cryptocurrency assets. This significant development emerged during a two-day summit held in New Delhi, where G20 members gathered to address key global issues.

The proposed framework, slated to commence information exchange between countries starting in 2027, has garnered substantial support from the G20 leaders. A consensus declaration signed by these leaders explicitly called for the swift implementation of the Crypto-Asset Reporting Framework (CARF) and revisions to the Common Reporting Standard (CRS). They have also called upon the Global Forum on Transparency and Exchange of Information for Tax Purposes to collaboratively identify an appropriate and coordinated timeline for initiating exchanges among relevant jurisdictions.

Numerous countries, including 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, and the European Union, would be directly impacted by this forthcoming framework. It’s noteworthy that approximately two-thirds of the world’s population resides in a G20 member country.

The Crypto-Asset Reporting Framework was initially introduced by the Organization for Economic Cooperation and Development in October 2022. The framework was conceived to provide tax authorities with enhanced visibility into cryptocurrency transactions, including insights into the individuals involved.

Under the proposed framework, countries would engage in automatic annual information exchanges regarding cryptocurrency transactions across jurisdictions. This comprehensive approach would encompass transactions conducted on unregulated cryptocurrency exchanges and by cryptocurrency wallet providers.

Cryptocurrency transactions have already become subject to heightened disclosure standards in numerous countries. For instance, in May, the European Union adopted updated regulations to align with the CARF. These regulations mandate that the transfer of digital assets must include the beneficiary’s name, their distributed ledger address, and their account number.

Additionally, the G20 leaders endorsed recommendations put forth by the Financial Stability Board related to the “regulation, supervision, and oversight of crypto-assets activities and markets and of global stablecoin arrangements.” These recommendations, published in July, advocate for the application of similar standards to stablecoins as those imposed on traditional commercial banks. They also urge regulatory bodies to prevent activities that hinder the identification of involved participants, among other important measures.

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