Main Points :
- The U.S. government has begun reviewing a regulation that would allow the IRS to obtain tax data from Americans’ overseas crypto accounts.
- The regulation aims to integrate the U.S. into the OECD’s Crypto-Asset Reporting Framework (CARF).
- CARF is a major international initiative to automatically exchange crypto-asset holdings between governments, similar to the CRS system used for bank accounts.
- More than 60 jurisdictions—including Japan, Germany, France, Canada, the UAE, Singapore, and the Bahamas—have already signed on.
- The U.S. is positioning itself for the global 2027 launch of CARF, with the goal of preventing tax avoidance, improving competitiveness, and supporting domestic crypto growth.
- This shift will have broad implications for crypto exchanges, non-custodial wallets, OTC platforms, and cross-border investors seeking new revenue sources.
1: Why the United States Is Reviewing CARF Compliance
On November 18, reports confirmed that the White House began the review process for a new Treasury-submitted regulation that would give the Internal Revenue Service (IRS) access to information on overseas crypto accounts held by U.S. citizens. This marks a significant evolution in the U.S. government’s approach to the taxation of digital assets, reflecting both domestic enforcement priorities and global regulatory momentum.
The proposed regulation is specifically designed to align the United States with the Crypto-Asset Reporting Framework (CARF)—an initiative established by the Organisation for Economic Co-operation and Development (OECD) in 2022. Similar to how the Common Reporting Standard (CRS) enabled automatic information-sharing for traditional bank accounts, CARF introduces a parallel structure for crypto-asset data, covering:
- Custodial exchange accounts
- Brokerage accounts
- Certain DeFi-related holdings
- Digital asset transfers
- Crypto-asset sale proceeds
- Cross-border wallet activity
Once implemented, countries participating in CARF will automatically exchange information about the crypto holdings and transactions of foreign residents.
From a policy perspective, the U.S. has long been criticized for not joining CRS, which left a loophole: global money could flow into U.S.-based financial institutions without reciprocal disclosure. The adoption of CARF would close this gap for crypto assets and position the U.S. alongside global standards.
2: How CARF Fits Into the White House’s Broader Crypto Strategy
The Biden Administration already signaled its intentions earlier this year through a comprehensive policy report recommending that both the Treasury Department and IRS adopt CARF. The report stated:
“Implementing CARF will reduce incentives for U.S. taxpayers to shift crypto-asset holdings to offshore exchanges. Adoption also reduces competitive disadvantages for U.S. exchanges that currently face reporting obligations that foreign platforms do not.”
In other words, CARF is not merely about tax enforcement—it is also about:
1. Leveling Competitive Conditions for U.S. Exchanges
U.S.-regulated crypto exchanges must comply with extensive reporting and customer due diligence requirements. However, foreign exchanges often operate under lighter regimes.
CARF ensures that all participating jurisdictions collect similar data.
2. Enhancing Investor Protection and Market Integrity
The federal government argues that consistent international standards ultimately benefit U.S.-based investors.
3. Supporting the Growth of Domestic Crypto Markets
The report stresses that regulatory clarity reduces uncertainty and encourages long-term industry growth.
3: Global Momentum Behind CARF
CARF is already gaining international momentum. Major G7 economies—Japan, Germany, France, Canada, Italy, and the United Kingdom—have signed on. Moreover, key financial hubs such as Singapore, the UAE, and the Bahamas have also committed.
To illustrate the expanding participation, the following illustrative conceptual chart shows how CARF membership has grown year by year. (Note: values used are conceptual and for explanatory visualization only.)
This growth trajectory suggests that by its 2027 implementation, CARF may have broad global coverage similar to—or even larger than—the existing CRS system.
Such a network would significantly impact international taxpayers, OTC desks, multi-jurisdictional exchanges, and non-custodial wallet users who interface with centralized platforms.
4: What the U.S. Review Process Means Today
The regulation is currently under examination by the Office of Information and Regulatory Affairs (OIRA), a division of the Office of Management and Budget. OIRA checks whether the proposal aligns with presidential priorities and evaluates potential economic and administrative impacts.
The fact that the regulation is under OIRA review means:
1. Implementation Is Moving Forward
This is one of the final steps before a rule is published for public comment.
2. The U.S. Intends to Participate in the Global CARF Launch in 2027
Treasury officials have already indicated that they want CARF to be synchronized across many jurisdictions.
3. U.S. Crypto Tax Enforcement Will Become More Aggressive
Once CARF goes live, the IRS will automatically receive:
- Foreign exchange account balances
- Foreign crypto sales proceeds
- Offshore wallet activity connected to custodial points
- Cross-border transactions involving U.S. persons
The IRS is already preparing its infrastructure for digital asset reporting as required by the Infrastructure Investment and Jobs Act (IIJA). CARF extends those efforts globally.
5: Implications for Crypto Investors and Income Seekers
For investors looking for new revenue streams or emerging crypto assets, CARF introduces both new constraints and new opportunities.
1. Offshore Arbitrage Opportunities Will Shrink
Historically, some investors relied on foreign exchanges to reduce visibility. Under CARF, such strategies become risky.
2. Investment Platforms May Become More Reliable
Global standards reduce fraud, improve data quality, and create stronger customer protections.
3. OTC Desks and Non-Custodial Wallets Will See New Roles
CARF primarily targets custodial points.
Non-custodial solutions, self-sovereign wallets, and decentralized protocols that avoid custody may gain popularity.
However, once funds touch a custodial entity, reporting obligations will apply.
4. More Transparent, Professional Markets
Institutional investors favor transparent markets.
CARF may accelerate institutional adoption, improving liquidity and stability.
6: How CARF Could Affect Blockchain Companies
For companies building blockchain tools, Web3 products, or multi-asset wallets, the shift has several consequences:
1. Compliance Becomes a Competitive Advantage
Products aligned with CARF will become more attractive to licensed entities, financial institutions, and cross-border services.
2. Non-custodial Solutions Will Surge
Investors may choose tools that give them self-control without relying on custodial service providers.
3. Native Tokens and Ecosystem Coins Stay Relevant
CARF targets tax reporting, not token creation.
Projects issuing utility tokens—such as payment coins, governance tokens, or operational assets—retain full viability, as long as platforms follow reporting rules when converting or liquidating on custodial platforms.
4. Corporate Structure Planning Changes
Companies operating across the U.S., BVI, Singapore, UAE, and the Philippines will need:
- Cross-border reporting alignment
- Transparent documentation
- KYT and AML record-keeping consistency
- Exchange integration with CARF-compatible endpoints
This is particularly relevant for crypto payment apps, multi-chain wallets, and OTC trading platforms.
7: Recent Global Developments in Crypto Taxation
Beyond the U.S., several recent initiatives highlight that crypto tax transparency is becoming a universal movement:
EU Markets in Crypto-Assets Regulation (MiCA)
MiCA introduces strict rules for stablecoins, custodial providers, and token issuers.
Many of its data-reporting principles align with CARF.
Japan’s Push for Web3 and Tax Reform
Japan is actively reforming corporate taxation for crypto issuers and is committed to CARF, improving predictability for global investors.
Singapore’s Variable Treatment
Singapore supports CARF but continues offering favorable environments for blockchain startups (no capital gains tax, business-friendly rules).
UAE’s Dual Approach
The UAE participates in CARF but still promotes innovation zones such as ADGM and DIFC where crypto businesses thrive.
Overall, the global regulatory trend is moving toward harmonization—but with sufficient diversity to support innovation hubs.
8: What Investors Should Watch Ahead of 2027
From now until 2027, investors should prepare for:
- More strict KYC/KYT controls from centralized exchanges
- Increased cooperation between tax authorities
- Stronger record-keeping requirements
- Changes in onboarding flows for crypto exchanges
- Possible premium on privacy-preserving infrastructure
- Growth of hybrid custodial–non-custodial models
The winners will be companies and investors who embrace transparency while maintaining operational freedom through decentralized tools.
9: Conclusion
The United States’ move toward CARF marks a profound change in how the world treats crypto assets.
For investors seeking new opportunities, blockchain entrepreneurs building real-world solutions, and professionals looking for revenue-generating digital assets, the global shift to standardization offers both clarity and stability.
CARF will not stop innovation—it will simply push the industry toward more mature, transparent, and globally integrated systems. As we move closer to the 2027 rollout, the crypto ecosystem will continue evolving into a more regulated yet more trustworthy environment, opening doors for long-term growth, institutional investment, and sustainable international expansion.
