These insights build on my recent conversation with Ajay Shamdasani on Regulatory Ramblings podcast episode #79, where we discussed how CARF and CRS 3.0 are reshaping crypto compliance and the broader governance landscape.
As crypto moves into the regulatory mainstream under CARF and CRS 3.0, institutions must embed digital-asset oversight into governance, data, and risk systems instead of treating it as a separate process.
When I said that the line between digital assets and traditional finance no longer exists, I meant it literally. With CARF, the OECD’s Crypto-Asset Reporting Framework, and CRS 3.0, crypto has moved from the edges of innovation into the core of financial regulation. The result is a new compliance perimeter that merges digital assets, banking, and cross-border tax transparency into a single system of accountability.
This is not a technical upgrade. It is a governance reset. Financial institutions must now manage crypto with the same rigor they apply to fiat transactions, yet most internal structures are not built for that level of integration. Policies, systems, and training remain siloed, creating blind spots that regulators will no longer overlook.
The Dual Nature of Blockchain
Blockchain technology offers both opportunity and exposure. From an investigative standpoint, it is one of the best audit trails ever designed. It is immutable, timestamped, and transparent to those with the right tools. Law enforcement agencies already use blockchain data to trace illicit funds across borders.
However, the same transparency that benefits investigators challenges compliance departments that lack unified systems to capture and reconcile crypto transactions. The ability to map ownership, sender-receiver information, and beneficial ownership data must be built into every institution’s core infrastructure.
Beyond Speculation
Crypto’s volatility remains a serious risk factor. Many institutions still treat digital assets as speculative holdings rather than as regulated financial instruments. That mindset will not survive under CARF and CRS 3.0. To maintain stability, institutions will need clear valuation policies, real-time monitoring, and governance frameworks that treat crypto as part of overall capital and liquidity management. As crypto becomes more closely linked to fiat currency, speculative gains will give way to compliance-driven oversight that reduces the “Wild West” element that has defined the sector for the past decade.
Political and Structural Forces
The regulatory transformation ahead is not just technical. It is also political. From Hong Kong to Washington to Brussels, governments are aligning around the need for unified reporting and transparency. This convergence creates both complexity and opportunity. Institutions operating across jurisdictions will need to reconcile different disclosure requirements while navigating political and economic pressures that shape crypto policy. Those that understand these differences and align governance accordingly will gain a strategic advantage in cross-border compliance.
Closing the Compliance Gaps
In my view, most institutions continue to fall behind in five key areas:
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Incomplete wallet-ownership capture and sender-receiver data
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Misaligned AML, KYC, and tax-due-diligence processes across business lines
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Weak cross-border policy coverage and lack of standardized controls
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Limited interoperability among compliance tools and departments
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Insufficient staff training and board-level understanding of digital-asset exposure
Each of these weaknesses can be addressed through structured integration. Compliance readiness under CARF and CRS 3.0 requires a unified policy framework, a centralized data environment, and ongoing education that brings compliance, legal, product, and technology teams into the same conversation.
The Governance Imperative
The next phase of readiness will be determined at the board level. Directors must understand how digital-asset exposure affects risk appetite, lending, and liquidity. Crypto cannot remain a side topic delegated to a single department. It must sit at the center of enterprise-wide governance. Institutions that embed digital assets into their compliance DNA by aligning policy, staffing, technology, and oversight will not only meet regulatory expectations but also strengthen resilience and credibility in a fast-changing market.
Final Thought
CARF and CRS 3.0 represent a turning point. Financial innovation and compliance are no longer competing priorities. They are parallel mandates. Institutions that act now to unify frameworks, invest in training, and modernize data architecture will emerge stronger. Those that delay will find themselves explaining to regulators why their systems were built for a world that no longer exists.
🎧 My full conversation with Ajay begins at 22:05:
Listen here
