The OECD’s Crypto-Asset Reporting Framework (CARF): A New Global Standard for Digital Asset Transparency 

Introduction 

Starting January 1, 2026, crypto-asset service providers (CASPs) will face a transformative shift under the Crypto-Asset Reporting Framework (CARF) and CRS 2.0. Unlike the original CRS, which focused solely on banks and traditional financial accounts, CARF expands the automatic exchange of information (AEOI) framework into the world of digital assets, including cryptocurrencies, stablecoins, NFTs, and certain DeFi positions. 

For professional crypto holders (CARPs) and high-frequency traders, this is no longer hypothetical. Every interaction with a compliant CASP, whether on centralized exchanges, custodial wallets, or specific DeFi platforms, can be automatically reported across jurisdictions. Pseudonymity, once a shield, is now largely ineffective in the custodial ecosystem. 

CARF merges the transparency goals of FATCA and CRS while creating a schema specifically tailored for digital assets. It emphasizes traceability, TIN integration, and standardized reporting, ensuring that every reportable transaction can be accurately matched with the user’s tax residence. 

CARF Meets CRS 2.0: A Deep Dive for Crypto Professionals 

CARF is designed to eliminate blind spots in crypto taxation. While CRS 2.0 extended reporting to some digital instruments, such as e-money and electronic wallets, crypto remained largely unaddressed. CARF closes this gap by defining precise obligations for CASPs and specifying which digital assets must be reported: 

• Exchange-traded cryptocurrencies like Bitcoin, Ethereum, and XRP 

• Stablecoins and algorithmic tokens 

• NFTs used as investment or collateral 

• Certain DeFi positions under custodial or governance control 

CARF introduces a technical reporting structure, including a CARF XML Schema, which governs how data is transmitted internationally. This schema requires precise capture of user identity, transaction details, and service provider information, creating a rigorous, automated framework for cross-border reporting. 

Who Must Report and What Gets Reported? 

CARF targets entities that have custody or control over crypto-assets, meaning platforms or services that can access, transfer, or manage user assets. These entities are responsible for collecting, verifying, and reporting information to tax authorities to ensure cross-border transactions are traceable and linked to the correct tax jurisdiction. 

Key reporting entities include: 

• Centralized Exchanges and Brokers: Platforms where users buy, sell, or trade crypto-assets. They manage accounts and hold custody of funds, making them the primary reporting point. 

• Custodial Wallets: Providers that hold private keys on behalf of users. Custodians are responsible for reporting even if users initiate transactions. 

• Crypto Payment Processors: Services facilitating crypto payments for goods, services, or peer-to-peer transfers. Transactions exceeding reporting thresholds, like RRPTs, must be captured. 

• Certain DeFi Protocols with Governance Control: Platforms that can move or manage user funds under administrative privileges fall within CARF’s scope. 

What gets reported:

CARF requires entities to submit two main categories of information: 

RCASP Information: Legal identity, nexus to the reporting jurisdiction, and internal identifiers of the Reporting Crypto-Asset Service Provider. 

Crypto Users and Relevant Transactions: Identity details for users and controlling persons, along with all reportable transactions, including: 

• Crypto-to-crypto trades 

• Crypto-to-fiat exchanges 

• Transfers to unhosted wallets or other users 

• Reportable Retail Payment Transactions (RRPTs) exceeding threshold amounts 

This framework ensures full traceability of transactions, linking each activity to a verified user and jurisdiction, enabling tax authorities to monitor cross-border flows with precision. 

The Role of TINs in Crypto Tax Transparency 

At the heart of CARF compliance is the Tax Identification Number (TIN). Every user, whether an individual or an entity, must have a verified TIN, which links all reportable transactions to the correct tax jurisdiction. In the CARF XML Schema, the TIN is a mandatory validation element for both RCASPs and Crypto Users. If unavailable, the placeholder “NOTIN” is used, with the Unknown attribute set to true 

TIN verification is no longer a procedural formality, it is a strategic requirement for cross-border visibility and audit readiness. Errors or missing TINs can trigger multi-jurisdictional audits and reporting discrepancies, exposing CARPs to penalties 

Practical Industry Solution: TaxDo 

To support CARPs and CASPs in meeting CARF and CRS 2.0 requirements, TaxDo provides automated TIN validation solutions: 

Official Global Real-Time TIN Lookup (GTL): Offers real-time verification of business TINs directly against official tax authority databases in 130+ countries, ensuring maximum compliance during onboarding or reporting. 

Global TIN Syntax Verification (GSV): Validates syntax, structure, and checksums of TINs for individuals and businesses across 195+ countries, covering cases where authorities cannot provide direct verification. 

With CRS 2.0 starting in January 2026, clients are already testing and integrating TaxDo into their workflows. Beyond TIN validation, TaxDo provides: 

• Screening against 290+ global watchlists, including sanctions, AML, PEPs, and wanted lists 

• Automated red-flag detection for regulatory compliance with CBI and RBI 

• CRS 2.0-focused compliance features supporting the 2026 CARF rollout 

Integration of TaxDo can automate 80–90% of TIN validations, reducing manual reviews and errors. During self-certification reasonableness tests, GTL provides instant official confirmation, while GSV catches syntax issues upfront, ensuring audit-ready compliance for both individuals and entities. 

TINs are more than identifiers. They are the foundation of cross-border transparency, traceability, and regulatory confidence. TaxDo provides the coverage and operational efficiency CASPs and CARPs need to meet global reporting standards. 

CARF Compliance Workflow 

CARF compliance is a structured, operational process, codified in the CARF XML Schema: 

1. Customer Due Diligence (KYC & TIN Verification): CASPs identify users and controlling persons, ensuring all mandatory identity elements are captured 

2. Transaction Capture: Every acquisition, disposal, swap, or transfer is tracked, including crypto-to-crypto, crypto-to-fiat, inbound/outbound transfers, RRPTs above USD 50,000, and transfers to unhosted wallets. Amounts must be reported to the sixth decimal place, with ISO 4217 currency codes 

3. Data Aggregation & Validation: Reports are compiled into CARF XML messages, with mandatory message header elements such as TransmittingCountry, ReceivingCountry, MessageRefID, MessageTypeIndic, ReportingPeriod, and Timestamp 

4. Domestic Reporting: Annual submission to local tax authorities, with records maintained for at least 5–7 years 

5. Automatic Exchange: Information is shared via the OECD AEOI network, ensuring cross-border tax transparency 

The CARF XML Schema 

CARF’s schema ensures technical consistency and validation for international exchange: 

• Message Header (Section I): Identifies sending/receiving tax authorities, reporting period, type of report (original, correction, deletion), and timestamps 

• Organisation Party Type (Section II): Captures RCASP and Entity Crypto User information, including TIN, name, address, and country of residence 

• Person Party Type (Section III): Captures individuals, including RCASPs, Crypto Users, and controlling persons, along with birth information, TIN, and address 

• CARF Body (Section IV): Contains RCASP details, Crypto Users, Controlling Persons, and all Relevant Transactions 

Relevant transactions are grouped for reporting: crypto-to-crypto, crypto-to-fiat, inbound/outbound transfers, transfers to unhosted wallets, and RRPTs exceeding USD 50,000, with amounts and units reported to precise standards 

Jurisdictional Rollout and Their Role in CARF 

CARF is being implemented across multiple jurisdictions, each playing a distinct role in ensuring global crypto tax transparency 

• EU (DAC8): 
  Harmonizes CARF reporting across all member states starting January 2026, ensuring consistent definitions for reportable transactions, user categories, and TIN verification. EU regulators enforce mandatory DPIA and GDPR compliance, creating a unified compliance benchmark 

• G20 Members (US, UK, France, Germany, Japan, Australia, etc.): 
  Serve as the backbone of global AEOI, integrating CARF with existing CRS/FATCA infrastructure, enforcing XML schema compliance, validating TINs using official tax authority databases, and conducting audits and red-flag checks for high-value or suspicious transactions 

• Asia-Pacific (Singapore, UAE, Hong Kong): 
  Act as regional crypto hubs, implementing CARF-aligned reporting systems, integrating TIN verification workflows, ensuring timely cross-border data exchange with OECD AEOI partners, and coordinating enforcement while maintaining a crypto-friendly regulatory environment 

Operational Timeline: 

• Data Collection: Starts January 2026, requiring full transaction, user, and TIN capture 

• Cross-Border Exchange: First automatic exchanges occur 2027–2028 via the OECD network 

Implications for Multi-Jurisdictional CARPs: 

• Map wallets and exchanges to reporting jurisdictions to avoid double reporting 

• Ensure TIN consistency across jurisdictions 

• Track local compliance variations, including thresholds and RRPT definitions 

Each jurisdiction enforces CARF and contributes to the global AEOI network, making compliance a coordinated international responsibility 

Practical Compliance Roadmap for CARPs 

Navigating CARF is no longer optional. Compliance demands a strategic, structured approach that bridges blockchain activity with international tax transparency. Here’s the roadmap for professional crypto holders: 

1. Map and Consolidate Custodial Wallets: Catalog all wallets, including centralized exchanges, custodial wallets, and DeFi positions. Consolidating assets reduces complexity, minimizes reporting errors, and ensures schema compliance 

2. Validate and Link TINs Across All Accounts: Every account must be linked to a verified TIN. Platforms like TaxDo automate this process, combining real-time verification and syntax checks across 195+ countries 

3. Maintain a Comprehensive Transaction Ledger: Record all acquisitions, disposals, swaps, and transfers with precise details: wallet addresses, timestamps, units, fiat-equivalent values, and ISO 4217 currency codes 

4. Implement Long-Term Record Retention: Retain records for 5–7 years, enabling reconciliation, audit responsiveness, and demonstration of due diligence 

5. Engage Crypto-Savvy International Tax Advisors: Advisors help optimize reporting, structure holdings, anticipate regulatory changes, and ensure compliance across jurisdictions 

Each step transforms compliance from a checkbox exercise into a holistic, audit-ready strategy, fully aligned with CARF’s global objectives 

Market Implications and Future Outlook 

CARF is set to reshape the crypto landscape in profound ways, creating both opportunities and challenges for professional crypto holders and service providers. 

On the positive side, CARF introduces regulatory clarity and standardized reporting practices, which can strengthen institutional trust in the crypto sector. Transparent reporting may encourage broader adoption by investors and financial institutions that previously viewed crypto markets as opaque or high-risk. 

However, these benefits come with trade-offs. CARPs and CASPs will face higher compliance costs, reduced anonymity for transactions, and the potential migration of activity to non-participating jurisdictions. FX and crypto-to-fiat flows may be monitored more closely, influencing liquidity, trading behavior, and price dynamics across certain markets. 

Looking ahead, CARF’s reach is expected to expand beyond traditional exchanges into emerging areas of digital finance. This includes: 

• DeFi platforms, particularly those with governance or custodial control over assets 

• NFT marketplaces, especially when NFTs are used as investment or collateral 

• Central Bank Digital Currencies (CBDCs), which may fall under standardized reporting in the future 

To navigate this evolving landscape successfully, forward-thinking CARPs should implement cross-chain compliance monitoring, maintain engagement with CARF-compliant CASPs, and proactively track changes in global reporting requirements. By doing so, they can not only remain compliant but also leverage transparency as a strategic advantage in a maturing market 

Conclusion 

CARF fundamentally changes how crypto tax compliance is managed. Professional crypto holders and CASPs must ensure accurate TIN validation, maintain complete and auditable transaction records, and enforce strict reporting standards for all relevant transactions, including crypto-to-crypto, crypto-to-fiat, and transfers to unhosted wallets. Compliance is no longer optional; it is a critical operational requirement that directly affects cross-border transparency, regulatory alignment, and the ability to participate fully in the global crypto ecosystem.