The Channel Islands have pledged to support global efforts to regulate the rapidly developing area of crypto assets. Guernsey and Jersey co-signed an agreement with 46 other countries and jurisdictions. Alison Dodd, Sales Director – Head of New Business at Newgate Compliance comments.
What is the Crypto-Asset Reporting Framework (CARF)?
The Organisation for Economic Co-operation and Development (OECD) has developed the Crypto-Asset Reporting Framework (CARF) which aims to establish an international standard for the automatic exchange of information between tax authorities with respect to crypto assets by 2027.
Crypto assets are digital assets that use online public ledgers to prove ownership. The asset class includes coins and tokens such as Bitcoin, and the global cryptocurrency market capitalisation is $1.42 trillion as of 24 November 2023.
Guernsey and Jersey have signed the CARF along with jurisdictions including Singapore, the Cayman Islands, France, Germany and the UK.
Alison Dodd, Sales Director – Head of New Business at Newgate Compliance, welcomed the co-signing and explained the significance of the international agreement: "The Channel Islands’ participation in the CARF underscores the jurisdictions’ commitment to international tax transparency, which is long established and a real benefit for the islands on the international stage.
“Following the Framework developed by the OECD and collaborating with jurisdictions around the world reflects a collective drive to combat tax avoidance in the dynamic and fast-evolving crypto asset landscape. Implementing the CARF aligns the Channel Islands with global standards, ensuring tax compliance and fostering trust for the jurisdiction and its clients."
This framework is seen as a necessary step to keep up with the fast-paced growth of the crypto-asset market and to prevent the erosion of recent gains in global tax transparency.
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