The White House is moving forward with a plan that would allow the Internal Revenue Service (IRS) to monitor cryptocurrency transactions by U.S. taxpayers on overseas platforms. This initiative is intended to bring the U.S. in line with international tax practices and combat global tax avoidance. The proposal, which was sent to the Office of Information and Regulatory Affairs last week,
aims to adopt the Crypto-Asset Reporting Framework (CARF)
, a global standard created by the Organization for Economic Cooperation and Development (OECD) to streamline the automatic exchange of crypto tax information across borders. The White House had previously
supported CARF in a report released in the summer of 2025
, noting that it would discourage Americans from moving digital assets to foreign exchanges and help ensure fair competition for U.S.-based crypto businesses.
CARF, which is scheduled for worldwide rollout in 2027,
has already received commitments from 72 nations
, including leading economies such as Japan, Germany, and the UK, as well as crypto hubs like Singapore and the UAE. By participating, the U.S. would be able to access transaction records from international exchanges, giving the IRS new tools to monitor capital gains and enforce tax laws. According to the White House report,
CARF will not introduce additional reporting requirements
for decentralized finance (DeFi) activities, which was a significant compromise for the crypto sector.
Experts anticipate that CARF will reshape the global crypto landscape by boosting transparency and reducing opportunities for tax evasion.
The framework is designed to simplify the process of tracking international crypto transactions by introducing unified reporting standards that work with major blockchain systems.
This development represents a major turning point
in the regulation and taxation of digital assets.
Within the U.S., the IRS is also gearing up for tighter regulations.
Beginning January 2026, American crypto exchanges
will need to provide the IRS with 1099-DA forms, detailing both incoming and outgoing crypto transactions. Together with CARF, this step is part of a broader initiative to reduce anonymity in digital asset transfers. Clinton Donnelly, a crypto tax lawyer based in the U.S., called these changes "the start of the end for crypto anonymity," highlighting the IRS's increasing ability to monitor blockchain transactions.
The proposal is under review as the IRS faces leadership challenges. President Donald Trump recently rescinded his nomination of Donald Korb, an experienced tax lawyer, for the position of IRS chief counsel, raising concerns about the agency’s readiness to handle complex regulatory changes. Nonetheless,
the Treasury Department is still responsible
for finalizing CARF-related regulations before the 2027 implementation date.
The changing regulatory landscape has already influenced the value of leading cryptocurrencies, with
Bitcoin
and
Ethereum
seeing price swings as investors respond to new policy signals. Some analysts believe that clearer regulations could eventually bring stability to the market, but for now, uncertainty remains high.
As more countries adopt CARF
, the effects on the market are expected to intensify, especially for platforms operating without regulatory oversight.
Opponents warn that expanding IRS oversight could threaten user privacy, particularly for those using self-custody wallets outside the traditional financial system. Supporters, however, argue that these steps are necessary to stop tax evasion in a sector where assets can be moved instantly across borders.
With the pace of CARF adoption increasing worldwide
, the U.S. faces mounting pressure to finalize its regulatory strategy, seeking a balance between strict oversight and fostering innovation in the crypto industry.
