As the Crypto-Asset Reporting Framework moves from OECD blueprint to domestic law, crypto and payments firms are preparing for a step change in tax transparency that brings digital assets firmly into the regulatory mainstream.
The global push to bring crypto-assets into the regulatory mainstream took a decisive step forward with the introduction of the Crypto-Asset Reporting Framework (CARF), a new international standard designed to close long-standing tax transparency gaps in the digital asset economy.
Developed by the Organisation for Economic Co-operation and Development, CARF establishes a common approach for collecting and exchanging information on crypto-asset transactions between tax authorities. While not a piece of law in itself, the framework is now being embedded into national legislation across major economies, with rules coming into force from early 2026.
Why CARF was created
Crypto-assets have grown rapidly as a means of investment, payment and value transfer, but they have historically sat outside the scope of traditional tax reporting regimes such as the Common Reporting Standard (CRS). This has created blind spots for tax authorities, particularly where transactions occur cross-border or outside conventional financial institutions.
CARF is intended to address this imbalance. The OECD has framed the initiative as a way to ensure crypto-assets are subject to the same level of international tax transparency as bank accounts and securities, without attempting to regulate the assets themselves.
In practice, the framework gives tax authorities greater visibility over crypto-asset activity and enables the automatic exchange of information between participating jurisdictions.
Who must comply
The framework applies to Reporting Crypto-Asset Service Providers (RCASPs). This broadly includes entities that facilitate crypto-asset transactions for customers as a business.
In scope are centralised crypto exchanges, brokers, certain wallet providers and other intermediaries that execute or facilitate transactions on behalf of users. CARF has also been drafted to capture some decentralised arrangements, where there is a party that can reasonably be expected to carry out due diligence and reporting obligations.
Purely peer-to-peer activity with no intermediary, as well as certain non-transferable or low-risk digital assets, may fall outside scope, but the framework is deliberately wide-ranging.
Speaking to Payment Expert, Pete Chapman, head of Web3 and Digital Assets for Richardson Lissack, the single biggest compliance risk under CARF is most likely regulatory relationships.
“CARF compliance is a significant undertaking: requiring substantial data assessment, collection, and reporting. And this is coupled with considerable enforcement risks – with defined penalties for non-compliance,” he says. “CARF should be viewed in the wider bifurcation of the crypto market between the jurisdictions that are subject to robust regulatory regimes, and those that are not. CARF has landed in the middle of that process, and firms that wish to be part of the regulated crypto market should be careful not to sour regulatory relationships, just as they begin.”
What information must be reported
Under CARF, in-scope providers must collect and report information relating to both customers and transactions.
Customer data typically includes name, address, jurisdiction of tax residence and tax identification number. Transactional data covers exchanges between crypto-assets and fiat currency, crypto-to-crypto trades and transfers of crypto-assets, including where those transfers are used to pay for goods or services.
Reports are submitted to the provider’s domestic tax authority, which can then exchange that information automatically with tax authorities in other CARF-adopting countries.
When the rules apply
CARF was published as a global standard in 2022, but it only becomes legally effective when implemented into domestic law.
Most major jurisdictions, including the UK and EU member states, have worked to a January 1, 2026 start date. In the EU, CARF is being implemented through DAC8, which extends administrative cooperation on tax matters to crypto-assets. In the UK, HMRC is introducing parallel reporting rules aligned to the OECD framework, enforced by HM Revenue & Customs.
Although obligations begin in 2026, the first reports will generally be filed in 2027, covering activity from the 2026 calendar year.
Why this matters for payments and crypto firms
For crypto-native businesses, CARF introduces compliance obligations closer to those long faced by banks and payment institutions. This includes customer due diligence, data quality controls and systems capable of capturing and reporting large volumes of transaction data.
For payments firms operating at the intersection of fiat and crypto, the framework is another signal that crypto activity is being folded into the mainstream regulatory perimeter. Stablecoins, on-ramps and off-ramps, and hybrid payment models may all be affected, depending on how services are structured.
“CARF compliance requires a considerable degree of due diligence, data analysis, and reporting. For many firms, compliance with CARF will necessitate a significant uplift in their compliance functions,” says Chapman.
“It is a little frustrating that these requirements have come into force while jurisdictions such as the UK are still finalising their cryptoasset regimes. However, given the long lead-in and the care with which both CARF and crypto regimes are being implemented, the risk of inconsistent rules or requirements (at least in any single jurisdiction) appears low.”
“Firms should view CARF simply as their latest compliance milestone: to take the opportunity to further embed robust and flexible compliance programmes, ready for the next milestone.”
Broadly, CARF reinforces a regulatory direction of travel: crypto-assets are no longer treated as a niche or exceptional category when it comes to financial transparency.
CARF does not introduce new taxes or define how crypto-assets should be taxed. Instead, it strengthens the ability of tax authorities to enforce existing rules by ensuring they have access to consistent, cross-border data.
As implementation accelerates ahead of 2026, the framework is set to become a permanent feature of the global financial reporting landscape. For firms operating in crypto and payments, the question is no longer whether reporting will be required, but how effectively systems and processes can adapt to meet the new standard.
