December 2025 OECD clarification
The eight-page FAQ clarifies four CARF sections: service-provider nexus, reporting, due diligence and defined terms. It explains OECD interpretation and certain options for implementing jurisdictions; it does not itself impose one Singapore start date or exercise every domestic option.
Section I: a branch as the highest nexus
Where the highest connection to an implementing jurisdiction is a regular place of business through a branch, the default is due diligence and reporting for ALL relevant transactions effected by the entity, rather than that branch alone. Another branch and Sections I(G) or (H) may change the result. During early staggered implementation, an exceptional branch-only approach may apply unless the jurisdiction specifies otherwise. Merely having customers in a jurisdiction does not establish a regular place of business.
Section II: retail payments and the USD50,000 threshold
An agent for a customer reports a relevant-crypto payment to a merchant exceeding USD50,000 as a reportable retail payment transaction. An agent for the merchant normally reports a transfer instead, but where domestic AML rules require verification of the merchant’s customer, that customer must also be treated as a crypto-asset user and the payment reported in the retail-payment category. Aggregate reportable retail payments separately. Transfers below the threshold remain in ordinary transfer aggregates; they are not omitted altogether.
Asset names and outsourced reporting
Use the Digital Token Identifier registered with the Digital Token Identifier Foundation where one exists; otherwise report the full asset name. A jurisdiction may permit third-party reporting, but it must be in the provider’s name and the provider retains responsibility. Outsourcing does not transfer the legal obligation.
Section III: entities without residence and acquired businesses
For a partnership, LLP or similar arrangement without tax residence, the principal-office address may be used only where no other documentation determines effective management. An acquirer may rely on completed due diligence for transferred entity users and their controlling persons, as for individual users, until it knows or has reason to know the status is inaccurate or circumstances change.
Section IV: non-custodial platforms and DeFi
Non-custodial exchange services are not automatically excluded. A provider making a trading platform available can be in scope without custody where control or sufficient influence allows compliance. For DeFi, an implementing jurisdiction may defer the control/influence test pending further interpretative guidance and regulatory developments, including FATF developments. This is an implementation option, not a universal exemption.
Wrapping and liquid staking
Exchanging a relevant crypto-asset for another relevant crypto-asset representing it is an exchange transaction. This includes cross-chain wrapping, same-chain tokens enabling automated uses, and transferable liquid-staking tokens. The CARF reporting classification applies regardless of whether local tax law regards the transaction as a taxable disposal.
Collateralised loans: all three transfer labels
A transaction is an exchange only where the provider can identify acquisition or disposal in compensation for fiat or another relevant asset. Assets lent or pledged as collateral are not that compensation; uncertain transactions are reported as transfers. Report the borrowed asset’s delivery and return as “Crypto loan”, collateral deposit and return as “Collateral”, and a separate crypto payment compensating the lender as “Other”.
Financial institutions and excluded persons
CRS information already held, including public information, may support CARF excluded-person classification only if it conclusively identifies a financial institution other than the investment entity described in Section IV(E)(5)(b). A broad assumption that every CRS financial institution is excluded would miss this exception.
NFTs: all four exclusion indicators
A provider can adequately identify an NFT as unusable for payment or investment only where it represents neither financial assets nor fungible crypto-assets; is not marketed as an investment or financially regulated; is not a virtual asset under FATF AML/KYC recommendations; and has low value with no meaningful trading by value or transaction count. USD200 is an example of low value, not a universal standalone exemption. Jurisdictions may specify low-value and trading thresholds.
Tokenised financial assets restricted to traditional intermediaries
A tokenised asset is outside the relevant crypto-asset definitions where legal or regulatory restrictions permit holding and transfer only through custodial accounts at depository/custodial institutions. The same applies to regulated investment-entity equity transferable only by traditional registration or an issuer/agent-controlled ledger. Disintermediation must genuinely be unavailable. In these cases the amended CRS Section I(G) option is inapplicable; otherwise the asset can qualify as crypto and the option may apply.
Electronic money: redemption conditions
Every unit or token in an issuance must have the regulatory right to redemption at any time, at par and in the same fiat currency. Substantive restrictions undermining that right disqualify the product. Reasonable fees, AML/CFT checks, business-hours or designated-channel procedures can be compatible where they do not undermine par redemption. Providers may rely on relevant regulatory approvals or authorisations.
Electronic money: a change during the year
CARF reporting continues up to, but excluding, the date all electronic-money conditions are met; earlier transactions are not retrospectively reclassified. Thereafter the product is outside CARF and exchanges involving it are treated as fiat exchanges. An entity holding it for customers becomes a CRS depository institution, reporting year-end balances and interest where applicable. Jurisdictions may allow specified whole-year or part-year simplification.
Electronic money: multi-currency wallets
Each single-fiat-currency balance in a multi-currency wallet can satisfy the single-currency requirement. For CRS the holder’s electronic-money products form one notional depository account: report the overall balance and interest together. Apply ordinary aggregation and currency-conversion rules, including when testing excluded-account status.
Official source
This article independently explains the substantive contents of the official PDF, including the relevant conditions, procedures and annexes. The linked document remains the authoritative source for its original wording, and later changes should be checked separately.
Read the official PDF ↗