G20 Advances International Crypto Reporting Framework as FASB Eases Rules

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g20 advances international crypto reporting framework
g20 advances international crypto reporting framework as fasb eases rules 3

Global finance leaders have agreed to implement a cross-border framework for crypto assets, while a key US accounting board voted to allow fair value reporting of digital currencies. The moves signal growing institutional adoption despite recent crypto market turmoil.

On G20 Summit 2023, Finance ministers and central bank governors from the G20 major economies met in India and backed prompt execution of the Crypto Asset Reporting Framework (CARF).

Under CARF, participating countries will automatically exchange information on crypto transactions annually starting in 2027. This will increase oversight of the crypto ecosystem across jurisdictions.

The G20 announcement also endorsed July 2022 proposals from the Financial Stability Board (FSB) on crypto regulation and stablecoins.

CARF Seen as Milestone for Crypto Monitoring

CARF was introduced last October by the Organisation for Economic Cooperation and Development (OECD) to curb international tax evasion using crypto.

Under the framework, tax authorities would receive identifying information on parties involved in crypto transactions like exchanges and wallet providers.

The European Union approved CARF implementation in May 2022. Experts see CARF adoption as a landmark for monitoring crypto’s growth worldwide.

FASB Votes to Allow Fair Value Crypto Accounting

Meanwhile in the US, the Financial Accounting Standards Board (FASB) voted on September 7 to let companies record digital assets at fair value.

This means firms can immediately show crypto gains/losses on income statements versus waiting to report impairments. The rule change takes effect for reporting periods starting after December 15, 2024.

Publicly traded companies like MicroStrategy have reported large crypto impairment losses under existing rules. The FASB update will improve optics around corporate crypto holdings.

Global Developments Reflect Crypto’s Growth

Despite recent upheaval in crypto markets following FTX’s collapse, adoption by mainstream finance continues.

CARF and relaxed accounting requirements indicate regulators and policymakers globally are taking growing notice of crypto’s scale. While uncertainty persists after FTX, the technology’s long-term disruptive potential seems assured.

As crypto oversight increases, investors can expect standards more akin to traditional finance – for better or worse. But greater legitimacy also expands the total addressable market for crypto assets and networks exponentially.

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