- Global economic leaders call for heightened crypto regulation.
- Two-thirds of the world’s population will be impacted by the new framework upon enforcement.
- Financial regulators, including the IMF and the FSB, will back the framework.
As cryptocurrencies continue to gain traction within the global financial landscape, the need for a structured regulatory framework has become increasingly evident. In recent years, several of the world’s largest economies have enthusiastically embraced cryptocurrencies, fostering an environment of acceptance.
In response, officials of the world’s leading economies, known as the G20, have announced the implementation of a new enforceable regulatory framework to promote transparency and visibility for crypto assets.
A United Call for Swift Action
At the recently concluded two-day summit held in New Delhi, the G20, led by India at present, announced their collective support for the swift implementation of a cross-border framework for crypto assets.
Sponsored
According to the framework, called the ‘Crypto-Asset Reporting Framework’ (CARF), the annual exchange of information on crypto transactions among these countries will begin in 2027. Responsibility for defining an appropriate timeline for these exchanges has been delegated to the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Furthermore, cryptocurrency transactions will face heightened scrutiny upon enforcing the new framework. Transfer of digital assets must be accompanied by critical details, including the beneficiary’s name, distributed ledger address, and the unique account number used. The measures aim to bolster transparency and accountability within the cryptocurrency ecosystem, aligning it more closely with established financial systems.
Sponsored
The framework is poised to make waves on a global scale. It will go into force across the G20 nations, which are the United States, the United Kingdom, China, Canada, Germany, Argentina, Brazil, Russia, Australia, France, India, Indonesia, Italy, Japan, Mexico, Saudi Arabia, South Africa, Turkey, South Korea, as well as the European Union.
Catalysts For CARF
Indian Prime Minister Narendra Modi highlighted the challenges posed by cryptocurrencies during the summit. In his statement, he addressed that cryptocurrencies are a new frontier for social order and financial stability, calling for developing global standards to regulate them.
Modi also underscored the growing concern about cybersecurity in cryptocurrency, noting that the realm has emerged as a new funding source for terrorism. He emphasized the importance of global cooperation and frameworks to secure cyberspace, critical aspects of every country’s security and prosperity.
The framework was first introduced by the Organization for Economic Cooperation and Development (OECD) in October 2022. The proposal was designed as part of a collaboration between the International Monetary Fund (IMF) and the Financial Stability Board (FSB).
On the Flipside
- India is set to revise its crypto regulation policy in the coming months after years of an outright ban.
- Park Min Woo, the director of the Capital Markets Bureau at the South Korean Financial Services Commission (FSC), revealed South Korea’s plans to ban Virtual Asset Deposit Services from 2024.
Why This Matters
The G20’s united stance on crypto regulation carries global significance. By advocating for international cooperation and establishing building blocks for coordinated action on dealing with crypto regulation, the Crypto-Asset Reporting Framework potentially paves the way for a global regulatory framework.
Assets management firms are taking the lead on crypto adoption. Read to learn more:
24% Of Asset Mangers Have Adopted Crypto
Hong Kong is committed to becoming a leading digital hub. Learn more:
Hong Kong Unveils New Recommendations To Boost Blockchain Leadership
