The White House is considering adopting the international CARF standard to enable the IRS to monitor crypto transactions in foreign jurisdictions and strengthen digital taxation.
The US administration has put forward a proposal that could transform how cryptocurrency transactions made by US citizens on foreign platforms are monitored. The Internal Revenue Service (IRS) would have access to information on digital asset transactions carried out outside the country, in an effort to strengthen tax transparency and reduce evasion in a rapidly growing sector.
The initiative in question, which is currently under review by the Office of Information and Regulatory Affairs, is directly linked to the Crypto Asset Reporting Framework (CARF), an international standard designed to harmonize the reporting of transactions with crypto assets and facilitate cooperation between tax authorities of different countries.
According to reports, the White House believes that adopting the CARF standard is key to preventing its taxpayers from moving their assets to offshore exchanges in order to evade tax obligations in the country.
Buy crypto with confidence at Bit2MeCARF is transforming the tax oversight of cryptocurrencies
The CARF was developed by Organization for Economic Cooperation and Development (OECD) In response to the expansion of digital assets and the need for a common supervisory framework, its purpose is to require crypto service providers, such as exchanges and custody platforms, to report detailed information about their clients' transactions to the relevant tax authorities.
This international standard seeks to replicate in the digital sphere what already occurs with the automatic exchange of financial information between countries, known as CRS. In practice, it would allow governments to access data on cross-border transactions, reducing opportunities for tax evasion and strengthening international cooperation.
In general, the United States' proposal to adopt this standard comes within a context where several jurisdictions have already begun preparing for the implementation of CARF. European countries, such as SwitzerlandThey have announced adoption timelines extending up to three years, aiming to give companies time to adjust their compliance systems. In Latin America, nations like Argentina have also shown interest in moving toward the adoption and implementation of this standard, recognizing that global financial integration demands clear and shared rules.
For its part, the White House maintains that the incorporation of CARF would not only strengthen transparency but also protect the competitiveness of local exchanges, which already operate under strict regulatory frameworks. By establishing a more level playing field, the aim is to prevent foreign platforms without reporting obligations from attracting US users seeking tax advantages.
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The debate surrounding the role of offshore exchanges has become one of the most sensitive issues in financial regulation. Many of these platforms operate without requiring clear identification or detailed reporting, which poses a significant challenge for U.S. authorities. They have indicated that this loophole jeopardizes both tax revenue and market stability, as it allows certain transactions to escape official oversight. However, the proposal under consideration seeks precisely to close this loophole and ensure greater control over transactions conducted outside the country.
At the same time, regulators acknowledge that the Decentralized Finance ecosystem has unique characteristics that cannot be treated in the same way as traditional exchanges. The White House has indicated that the rules outlined in the CARF agreement should not automatically apply to transactions on DeFi platforms, where there are no conventional intermediaries and transactions are conducted directly between users through smart contracts.
Although authorities emphasize the need to regulate this sector, experts say this approach reflects the difficulty of striking a balance between regulation and innovation. Within the debate, legislators, developers, and users hold differing positions. While some defend the need for clear and strict regulations to legitimize and protect the DeFi sector, others warn that imposing reporting obligations could limit development and alter the decentralized nature of these platforms, affecting their growth and disruptive potential.
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The review of the proposal to implement the CARF remains with the Office of Information and Regulatory Affairs, with no set timeline for final approval. However, it is clear that the United States is seeking to align itself with international trends in tax transparency and digital asset regulation.
If the CARF standard is adopted, it would mark a significant step forward in the U.S. strategy for monitoring crypto transactions in cross-border contexts. At the same time, it would send a clear signal to taxpayers and businesses in the sector about the importance of complying with tax obligations, regardless of where the transactions take place.
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