Description

The Crypto-Asset Reporting Framework (CARF) represents the next major evolution in global financial transparency. It builds upon a lineage that started with FATCA, evolved through the Common Reporting Standard (CRS), and now extends to the world of digital assets.

The Evolution:

• FATCA (Foreign Account Tax Compliance Act) — Launched by the U.S., FATCA was the original model for cross-border reporting. It forced non-U.S. financial institutions to disclose information about U.S. account holders or face a 30% withholding penalty on U.S.-sourced payments.
• CRS (Common Reporting Standard) — FATCA’s global successor, developed by the OECD, applied similar disclosure principles across participating jurisdictions.
• CARF — Now, the OECD’s CARF expands this reporting framework into crypto assets, ensuring transparency and compliance in an area once thought to be beyond reach.

Why It Matters:

CARF introduces structured, standardized rules for how crypto transactions are reported across borders. It aims to ensure tax authorities have visibility into digital asset holdings and transfers—bringing the crypto world into the same regulatory net as traditional finance.

In short:

FATCA started it, CRS globalized it, and CARF digitizes it—marking the next stage in the worldwide move toward financial transparency.