G20 to review crypto framework prepared by OECD- Details inside

G20 will review the cryptocurrency-related framework (that was recently submitted) in its upcoming meeting. The move is a part of the larger trend across the globe where countries are moving towards strong regulations in regard to cryptocurrency.

Finance Ministers and Central Bank Governors from G20 member states will be reviewing the Crypto-Asset Reporting Framework (CARF) presented by the Organization for Economic Co-operation and Development (OECD).

G20 consists of twenty countries such as China, India, South Korea, Brazil, the U.S., the United Kingdom, and the European Union.

Combating Tax Evasion

Last year, G20 tasked the OECD with creating a plan for cryptocurrency tax reporting among members.

The OECD opines that in contrast to traditional financial products, crypto assets can be owned and transferred without the involvement of traditional financial intermediaries like banks.

In addition, such transfers are not subject to the supervision of any central regulator. The cryptocurrency market has also given rise to service providers such as crypto exchanges and wallet providers that mostly remain unregulated.

In such circumstances, it is quite likely that individuals and groups can circumvent rules and regulations to evade taxes on gains made on cryptocurrency.

The proposed framework defines what crypto assets and NFTs are. It also provides a plan for crypto tax reporting among countries; it also includes provisions for crypto derivatives trading.

Many are looking at this development as part of the larger movement of regulatory bodies across the world to regulate the global crypto industry and bring it under its control.

Crypto assets are not covered by the OECD/G20 Common Reporting Standard (CRS) and extending its role to cover these digital assets is an underlying motive of the body.

“The Common Reporting Standard has been very successful in the fight against international tax evasion. In 2021, over 100 jurisdictions exchanged information on 111 million financial accounts, covering total assets of EUR 11 trillion,” said Mathias Cormann, OECD Secretary-General.