US Considers Global Crypto Tax Reporting Standard

The Internal Revenue Service’s ‘Broker Digital Transaction Reporting’ proposal, submitted to the White House last Friday, represents a significant step toward global tax coordination for digital assets. This framework would position the United States alongside 72 other nations that have committed to implementing the Crypto-Asset Reporting Framework by 2028. The CARF standard, developed by the Organisation for Economic Co-operation and Development (OECD), establishes a common approach for automatic exchange of tax information on crypto-assets, creating a unified global system for tracking cross-border cryptocurrency transactions.

While the IRS did not categorize the proposal as ‘economically significant,’ its implementation would fundamentally reshape the US crypto tax landscape. The framework’s core function involves requiring foreign crypto platforms to report American users’ account information directly to US tax authorities. This international cooperation mechanism mirrors existing information-sharing agreements for traditional financial accounts but adapts them specifically for the unique challenges posed by digital assets and decentralized platforms.

The proposed rules would force Americans to be far more stringent in reporting capital gains tax from foreign crypto platforms, effectively closing a significant reporting gap that has allowed some investors to potentially evade tax obligations. Currently, many US citizens can move digital assets to offshore exchanges with limited reporting requirements, creating challenges for the IRS in tracking taxable events and ensuring compliance with existing capital gains regulations.

Under the new framework, Americans using foreign crypto exchanges would face enhanced scrutiny as their transaction data becomes automatically accessible to US tax authorities. This increased transparency could deter the movement of digital assets to jurisdictions with less rigorous reporting standards, while simultaneously ensuring that capital gains from crypto investments—whether held domestically or internationally—are properly reported and taxed according to US law.

The proposal specifically targets ‘Broker Digital Transaction Reporting,’ indicating that crypto service providers—including potentially decentralized platforms and foreign exchanges—would bear responsibility for collecting and reporting user information. This approach mirrors traditional financial sector reporting requirements but adapts them to the borderless nature of digital asset transactions.

The White House’s review of this proposal signals a continued focus on bringing cryptocurrency into the mainstream regulatory framework, particularly concerning tax compliance and financial transparency. By aligning with international standards through CARF implementation, the United States would join a growing global consensus on how to approach crypto taxation, potentially reducing regulatory arbitrage opportunities and creating a more level playing field across jurisdictions.

This move represents part of a broader trend toward increased oversight of the digital asset ecosystem, following other regulatory initiatives aimed at combating money laundering, protecting investors, and ensuring market integrity. The CARF framework specifically addresses the tax evasion risks associated with crypto-assets’ pseudonymous and cross-border nature, providing tax authorities with tools similar to those used in traditional finance but tailored to digital assets’ unique characteristics.

For the crypto industry, adoption of these reporting standards would mean increased compliance burdens for platforms serving US customers, but also greater legitimacy and integration with the traditional financial system. The 2028 implementation timeline provides a multi-year adjustment period for both taxpayers and service providers to adapt to the new requirements, though the White House’s current review represents a critical first step toward making this international standard part of US tax law.