- Person 1 - Kathelijne Marritt Alers, Senior Product Manager, SIX
- Person 2 - Jürg Stalder, Head Tax and Regulatory Products, SIX
- Person 3 - Manuel Alonso, Senior Content Manager, SIX
Kathelijne Marritt Alers: Hello and welcome. My name is Kathelijne Marritt Alers, and I work as a Senior Product Manager at SIX. With me today, I have my colleagues Manuel Alonso and Jürg Stalder, and we would like to talk about reporting relevant crypto assets. This falls under the Crypto-Asset Reporting Framework (CARF), as you may have heard.
The parties that will likely have to do this reporting are so-called CASPs (crypto-asset service providers). With these main definitions out of the way, I would like to start with the first question: How does SIX support CASPs? Jürg, can you tell us a bit about this?
Jürg Stalder: Sure. Reporting CASPs under the Crypto-Asset Reporting Framework are a new type of user of SIX data. We support CASPs by providing reference data—identification and classifications—just as we do for traditional assets as well.
Specifically for CARF, we have developed a CARF indicator that helps us mark CARF-relevant assets according to the standard. We support CASPs in their reporting duties by providing this standard identification together with all the regulatory data sets we have built up around digital assets.
Kathelijne Marritt Alers: What are the key differences between CARF, its reporting requirements, and existing frameworks such as FATCA or CRS?
Jürg Stalder: Compared with CRS, it’s more helpful to focus on what is the same. Both CARF and CRS are international standards for the exchange of tax information.
CRS has been in place for the past 10 to 11 years, and it focuses on reporting traditional assets. CARF is about CARF-relevant crypto-asset transactions. The main difference is that, for traditional assets, you report on proceeds (such as interest, dividends, or other proceeds) and account balances, whereas with CARF the expectation is that you will report combined and accumulated crypto-relevant transactions.
Kathelijne Marritt Alers: Can there be differences between different jurisdictions under such a global standard?
Jürg Stalder: As this is a global standard—approved by 52 jurisdictions—there can be no variations with regard to the standard itself. The standard is the standard, and it includes definitions of what a crypto asset is.
However, like every standard, there is local implementation. Each jurisdiction that has committed to implement CARF will come up with a legal framework (a law or an ordinance) describing how to implement the standard. As we have seen in the past with other standards, local variations are possible regarding what constitutes a CARF-relevant asset. We believe the identification as set forth in the standard, and some of the exceptions already in the standard, will be the same across the jurisdictions that implement CARF.
Kathelijne Marritt Alers: Manuel, can you tell us a little bit about what types of data CASPs need, and what role accuracy and completeness of that data play?
Manuel Alonso: Thank you for this question. There is a complete description of what kind of data a CASP needs to provide for reporting purposes. Some of it is straightforward: you need to identify all reportable transactions of reportable crypto assets—whether the user is buying, selling, transferring, or whatever needs to be reported.
Moreover, the CASPs themselves must be disclosed, and every single field required for reporting must be provided, so that every step is recorded. You also need to identify wallets, as well as the reportable crypto assets.
This is where SIX offers several kinds of data to help CASPs create this reporting. One example is the name of the reportable crypto asset. This is included in the service because we use the standardized ISO DTI (Digital Token Identifier), and the reporting description mentions the DTI in a way that requires the name to be aligned with the DTI. As my colleague mentioned before, there are also aspects where you may report a “sign,” and we can offer identifiers to help CASPs create this kind of reporting.
Kathelijne Marritt Alers: Are there any technical considerations that CASPs need to be aware of?
Manuel Alonso: Yes—there are several technical and regulatory aspects, such as compliance, data integrity, and satisfying what the reporting demands from the CASP. And of course, CASPs must provide accurate data to regulatory bodies worldwide where this new regulation applies.
Kathelijne Marritt Alers: Are there any innovations in data tagging relating to CARF-relevant assets?
Manuel Alonso: Yes. After reading the OECD CARF standard, I immediately noticed something essential that I felt was missing: standardized codes for the classification of crypto assets.
I used to work closely with standards—specifically ISO standards—and there is an important aspect around identifying the economic functions of crypto assets. When we talk about crypto assets such as digital bonds, digital funds, payment tokens like Bitcoin and Ether, utility tokens, or stablecoins, there are many different types—maybe that’s why they didn’t create a specific classification.
But this is where we offer a service: we create classification and subclassification so that CASPs can use this data together with the DTI and consolidate the data they need for their reporting. Moreover, we also offer pricing—in real time, or end-of-day (Swiss time). Crypto assets don’t really have an end-of-day in the same way other assets do.
Kathelijne Marritt Alers: Thank you, Manuel. Thank you very much for your interest in this interesting topic of relevant crypto assets and the reporting thereof. I would also like to thank both of my colleagues for their valuable inputs.
If you’re interested in this topic and would like to find out even more on what SIX is doing, then please have a look at the SIX website for more information.