Multilateral Competent Authority Agreement

Abstract

Crypto-Assets: The impact on financial markets 1.The market for Crypto-Assets (including cryptocurrencies, as well as cryptography-based tokens) is growing rapidly.This is also affecting tax administrations, which must adapt to the growing role of Crypto-Assets.In particular, several characteristics of Crypto-Assets are likely to pose novel challenges in tax administrations' efforts to ensure taxpayer compliance. 2.Firstly, Crypto-Assets' reliance on cryptography and distributed ledger technology, in particular blockchain technology, means that they can be issued, recorded, transferred and stored in a decentralised manner, without the need to rely on traditional financial intermediaries or central administrators. 3.In addition, the Crypto-Asset market has given rise to a new set of intermediaries and other service providers, such as Crypto-Asset exchanges and wallet providers, which may currently only be subject to limited regulatory oversight.Crypto-Asset exchanges typically facilitate the purchase, sale and exchange of Crypto-Assets for other Crypto-Assets or Fiat Currencies.Wallet providers offer digital "wallets", which individuals can use to store their Crypto-Assets via authorisation through public and private keys.These services may either be provided in online (i.e."hot") wallets, or via service providers offering products allowing individuals to store their Crypto-Assets offline on downloaded (i.e."cold") wallets.Both types of products are relevant for tax authorities.