Beginning 1 January 2026, the Bahamas will implement the OECD’s Crypto Asset Reporting Framework (CARF), extending automatic exchange of information (AEOI) into the digital asset economy. This marks a significant milestone in the country’s commitment to cross-border transparency, placing crypto assets on equal footing with traditional financial instruments under international reporting standards.
CARF aligns the Bahamas with over 70 jurisdictions worldwide adopting the framework, including G20 members, EU countries, and key regional financial hubs. For Bahamian regulators, it ensures visibility over digital asset activity, protects domestic tax revenue, and strengthens participation in the global AEOI network.
International Context and Strategic Rationale
Crypto asset adoption is expanding rapidly, encompassing exchanges, custodial wallets, DeFi platforms, tokenized instruments, and stablecoins. Without reporting standards like CARF, this activity could migrate offshore or remain opaque to tax authorities.
By adopting CARF, the Bahamas aims to:
- Capture comprehensive crypto activity beyond fiat conversions, including staking, liquidity provision, and high-value transactions
- Prevent regulatory arbitrage by harmonizing crypto reporting with traditional financial accounts under CRS 2.0
- Enable cross-border cooperation with foreign authorities to ensure consistent tax treatment
CARF, in conjunction with CRS 2.0, forms the foundation of a unified AEOI ecosystem, covering both fiat and digital asset channels.
Scope and Applicability
CARF applies to Reporting Crypto Asset Service Providers (RCASPs) operating in the Bahamas. These include:
- Centralized exchanges and custodial wallet operators
- Crypto payment platforms and tokenized product managers
- DeFi platforms where the operator retains functional control or facilitates transactions
Reportable digital assets include:
- Cryptocurrencies like Bitcoin and Ethereum
- Stablecoins and tokenized financial instruments
- NFTs used for investment or financial purposes
Reportable transactions go beyond fiat conversions to include:
- Crypto-to-crypto trades
- Transfers to unhosted wallets
- Inbound and outbound movements across jurisdictions
- Staking rewards, yield farming, and liquidity provision
- High-value retail payments exceeding USD 50,000 annually
All activity must be aggregated per user annually and structured into the CARF XML Schema for submission.
Due Diligence and TIN Verification
CARF extends CRS-style due diligence into the digital asset sphere. RCASPs must:
- Collect verified identity information, tax residency, and TINs for all users
- Use administrative placeholder codes like NOTIN when TINs are unavailable, with proper justification and documentation
- Implement event-driven KYC refresh cycles for ongoing compliance
TIN validation is crucial. Errors or unverifiable data can trigger reporting failures and cross-border inquiries. Multi-jurisdictional platforms must maintain robust front-end validation, continuous monitoring, and automated remediation workflows to manage global client bases efficiently.
Transaction Capture and Reporting
CARF requires RCASPs to maintain precise, auditable records:
- Transaction timestamps and wallet identifiers
- Asset types, quantities, and valuation in ISO 4217 currency codes
- User-level aggregation and annual consolidation
All data must comply with the CARF XML Schema, ensuring:
- Uniform formatting for interoperability with foreign authorities
- Accurate identification of RCASPs, users, and assets
- Audit-ready, event-level trail to satisfy record-keeping obligations
Bahamian RCASPs are required to retain all supporting data for a minimum of five years, aligning with domestic tax and financial record-keeping requirements.
Implementation Timeline
- Draft consultation and guidance: 2025
- Operational readiness and due diligence start: 1 January 2026
- First annual CARF XML submissions: 2027, covering transactions from 2026
- Initial cross-border exchange under OECD network: 2027–2028
Early adoption and system upgrades are critical to prevent reporting delays and ensure full compliance from day one.
Operational and Compliance Considerations
CARF places digital asset services under operational standards similar to banking regulations:
- Onboarding workflows must capture verified tax residency and TINs
- Unhosted wallet movements and high-value transactions require monitoring and reporting
- Strong data governance is essential to minimize remediation burdens
- Long-term retention of supporting data ensures audit readiness
For institutional clients and high-volume traders, this framework demands careful wallet management, precise transaction logs, and early engagement with tax advisors to minimize discrepancies.
TaxDo: Automation for CARF Compliance
TaxDo provides a fully integrated platform for global AEOI compliance in digital assets:
- Global Tax Ledger (GTL): Validates TINs against official sources in 130+ jurisdictions and generates CARF-ready XML
- Global Identity Verification (GSV): Syntax and structural checks across 195 jurisdictions, ensuring reasonableness even where direct authority validation is unavailable
- Global Identity Intelligence Engine (GIIE): Continuous AML, PEP, and sanctions screening across 290+ watchlists, automatically updating user risk profiles
For Bahamian RCASPs, TaxDo integrates onboarding, identity verification, transaction capture, and XML filing, reducing errors, strengthening controls, and ensuring compliance across CARF, CRS 2.0, and other AEOI frameworks.
Conclusion
The Bahamas’ adoption of CARF marks a strategic step toward digital asset transparency, bringing crypto activity fully into the global tax ecosystem. For RCASPs, exchanges, and custodial platforms, operational readiness, strong data governance, and automated reporting are essential to meet international standards.
Institutions that invest early in infrastructure, compliance workflows, and transaction monitoring will gain a strategic advantage, entering 2026 prepared for full participation in the OECD’s cross-border AEOI network.