Crypto’s path to legitimacy runs through the CARF regulation

The path to legitimacy for cryptocurrency is increasingly tied to the Crypto-Asset Reporting Framework (CARF) regulation, which represents a major global effort to bring crypto under tax reporting standards similar to those in traditional finance.

CARF aims to enhance transparency and compliance by requiring crypto platforms and service providers to track and report detailed information about transactions, including who is moving what assets, where, and how much.

Over 60 countries have signed on to CARF, with implementation timelines starting in 2026 for EU countries and the UK, and others like the US, Singapore, UAE, and Hong Kong following in 2027-2028.

CARF applies broadly to crypto-asset service providers such as exchanges, brokers, ATMs, and even decentralized exchanges (DEXs) and non-custodial services, which historically avoided such reporting obligations.

The framework requires near-instant tax transparency rather than annual reporting, marking the end of crypto's previous resistance to surveillance and anonymity. This increased oversight is seen as crucial for the industry's responsible evolution and integration into the traditional financial system.

By embedding reporting and accountability into crypto platforms, CARF moves crypto from the financial "edges" into the regulated mainstream, improving trust and reducing illicit activity risks like tax evasion, which has been estimated to cost governments billions annually.

Jurisdictions adopting CARF must pass domestic legislation a year before reporting begins, ensuring a coordinated global approach to crypto tax compliance.

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