1 Introduction

The official website of the U.S. government shows that the U.S. Internal Revenue Service (IRS) officially submitted a proposal to the White House on November 14. This proposal, titled "CARF: U.S. Broker Digital Transaction Reporting", is centered on implementing the "Crypto-Asset Reporting Framework" (CARF) launched by the OECD. Once CARF is implemented, the IRS will be able to obtain data on overseas crypto asset accounts held by U.S. citizens. Currently, the White House is reviewing the proposal, and taking this event as an opportunity, this article will sort out and introduce the CARF framework—What is CARF? How did it develop? Has it started to be implemented?

2 What is CARF?

The "Crypto-Asset Reporting Framework" (CARF) is a global standard for tax transparency proposed by the Organisation for Economic Co-operation and Development (OECD) in 2022. Its core mechanism requires member countries to automatically exchange information on their citizens' crypto-asset holdings and transactions to effectively curb cross-border tax evasion.

The regulatory scope of CARF is very clear: it does not regulate the crypto assets themselves, but rather regulates the "entities that provide crypto-asset services". Under its framework, institutions that provide commercial services such as trading, custody, exchange, and management of transferable crypto assets to the public may be regarded as Reporting Crypto-Asset Service Providers (RCASPs) and must assume reporting obligations. Typical RCASPs include centralized exchanges, custodial wallet service providers, OTC and brokers, issuers that provide stablecoin buying/selling or redemption services, and institutions that, although named as DeFi, have an identifiable and operable entity behind them (such as a centralized frontend, a yield management platform).

According to the CARF framework, RCASPs need to carry out the following work for users (including institutional users and individual users): (1) Customer due diligence to identify their tax residence status, etc.; (2) Record and track user accounts, classify and statistically analyze information on crypto-asset-related exchanges, dispositions, acquisitions, and transfer transactions, and these records and data must be kept for at least five years. Annually, the RCASP will report the due diligence information and asset information to the tax authority in its jurisdiction. Subsequently, the tax authorities will automatically conduct international intelligence exchanges with each other—this is equivalent to building a global tax information network in the crypto asset field, filling the gaps in the existing standard for the automatic exchange of financial account information (CRS) in the crypto field.

The CARF rule system consists of three main parts:

(1) CARF Rules and Related Commentary

These rules and commentary are designed around four key elements: i) The scope of crypto assets covered; ii) The entities and individuals required to comply with data collection and reporting requirements; iii) The transactions to be reported and the reportable information related to such transactions; iv) Due diligence procedures for identifying crypto-asset users and controllers and determining the relevant tax jurisdictions for reporting and exchange purposes; Countries can convert the rules into domestic law to collect and exchange relevant reporting information from their domestic crypto-asset service providers with other countries with agreement relationships.

(2) Bilateral or Multilateral Tax Agreements

Bilateral or multilateral Competent Authority Agreements or Arrangements reached based on the CARF Rules and Commentary, regarding the automatic exchange of information.

(3) Electronic Reporting Format

The electronic format (XML format) used by Competent Authorities to exchange CARF information, as well as the electronic format used by Reporting Crypto-Asset Service Providers to report CARF information to the tax authorities (according to domestic law regulations).

3 The Development and Implementation of CARF

From its initial launch to widespread acceptance, the development of CARF reflects the embrace of the international community for the trend of crypto tax transparency.

2022: In early 2022, the OECD released a consultation paper on the proposed rule solutions, and later in October, released the final version of the Crypto-Asset Reporting Framework, proposing a globally unified standard for the cross-border exchange of information on crypto assets, marking the preliminary formation of the CARF rules.

2023: The OECD released the initial version of the XML Schema, FAQs, and operational guidance for due diligence and reporting, establishing executable technical and procedural rules for CARF.

2024: The OECD released the final version of the CARF XML Schema, and countries began preparations for domestic legislation and system docking.

CARF itself is an international standard formulated by the OECD and does not have direct legal effect; it must be truly implemented through the commitment of countries to join, legal transformation, and system docking. In other words, the time when CARF begins to be implemented in different countries/regions depends on the specific commitment of each country. OECD data shows that as of November 2025, 74 jurisdictions have formally committed to implementing CARF in 2027 or 2028, and 53 of these jurisdictions have signed the CARF Multilateral Competent Authority Agreement (CARF MCAA). Among them, the European Union passed the DAC8 Directive on Administrative Cooperation (tax transparency for crypto-assets) in 2023, requiring all EU member states to start collecting information from January 1, 2026, and complete the first round of cross-border information exchange before September 30, 2027, while other countries/regions are also successively advancing CARF.

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4 Conclusion

CARF is hailed as the CRS of the crypto world. Its goal is to establish a unified global tax information exchange framework, solve crypto-asset tax regulation issues, and provide tax authorities in various countries with more third-party data on taxpayers' crypto activities. The framework requires RCASPs to comply with detailed KYC requirements to ensure accurate and timely reporting of relevant information to tax authorities. The gradual implementation of CARF demonstrates the trend of global crypto taxation moving towards transparency and clearer crypto regulation. While promoting tax fairness, enhancing public trust, and increasing government revenue, it also places higher compliance requirements on intermediary institutions and taxpayers.

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