In mid-May 2026, the crypto world is being pulled in two opposing directions at the same time: on one side, the United States is "opening the door" at the institutional threshold, while on the other side, the global tax network is quietly tightening. The U.S. Senate Banking Committee has just passed a review of the CLARITY Act, establishing a framework for the legal status and regulatory responsibilities of digital assets; a few days later, on May 19-20, Trump signed a series of crypto-friendly executive orders, boldly proclaiming the intention to incorporate fintech and digital assets into the formal financial system, while calling for the Federal Reserve to assess whether to open access to the main accounts and payment system for compliant crypto and fintech companies. At the same time, the OECD's designed CRS 2.0 and CARF are beginning to be implemented in various countries, incorporating crypto assets, central bank digital currencies, and electronic currencies into the global automatic tax information exchange. The ambiguous territory of traditional offshore accounts is being gradually compressed, and Hong Kong has also announced plans to implement CRS 2.0 and CARF, requiring local exchanges, brokers, and ATM operators to fulfill reporting obligations. As the U.S. sends "friendly" signals at the access and infrastructure levels, the globe is building higher fences regarding reporting and transparency, forming a new pattern of "open access + strict reporting." In such a hedged situation, a question that cannot be avoided arises for everyone: Where and based on what standards will every dollar in exchanges, institutions, and personal accounts be redefined and regulated by the authorities?

CLARITY Act Advances Through Senate Framework

When the CLARITY Act passed the Senate Banking Committee in mid-May 2026, it was far from becoming an effective law, but it had already completed the transition from "technical discussion draft" to "official congressional agenda." For U.S. crypto legislation, the procedural significance of this step lies in the fact that it is the first time a dedicated law has been used to discuss "what digital assets actually are in the current financial system" and to write into the legislative framework "who will regulate, and what boundaries will apply," rather than relying solely on each regulatory agency's interpretations and enforcement standards. The committee's approval means that the full Senate will have to face this question directly, but there is still a long way to go before it becomes effective as the bill still needs to be voted on by the full Senate and the House of Representatives and finally signed by the President.

The CLARITY Act attempts to resolve the three long-standing issues regarding crypto assets in the U.S.: first, how to define legal attributes, whether to classify them according to traditional financial instruments or recognize them as a new class of assets; second, how to delineate regulatory powers and responsibilities, avoiding different regulatory agencies simultaneously extending their reach to the same category of tokens with inconsistent guidelines; and third, what set of rules will govern tax and compliance obligations on which calculations and declarations will be based. For token issuers, once classification standards are written into law, pre-issuance compliance planning will no longer just be about "guessing the regulator's thoughts," but must be designed against the legal provisions. For exchanges and custodial institutions, clearer regulatory channels and licensing paths may emerge in the future, but until the final text of the bill and supporting regulations are released, they still need to prepare for at least two or even more regulatory scenarios: one that assumes incorporation into a stricter financial regulatory system and another that anticipates the cross-check scrutiny arising from increased tax transparency. Whether CLARITY can deliver on its promise of providing certainty does not depend on whether it passes, but rather on how clearly the final version delineates asset classification boundaries and transitional arrangements.

Trump's Orders and Bitcoin Reserve Friendly Compliance

In contrast to the "slow and meticulous" process of the Congressional review of the CLARITY Act, Trump, on May 19-20, 2026, set the regulatory tone with a single crypto-friendly executive order: not laissez-faire but rather "bringing fintech and digital assets under management," while repeatedly emphasizing the integrity of the financial system and anti-money laundering requirements. The essence of this order lies in two points—first, acknowledging that crypto-related businesses should be included in the formal regulatory framework, and second, making it clear that they must undergo funding source investigations and transaction monitoring at standards equal to or even higher than those in traditional finance. In other words, the White House is not offering an "exemption" but rather a "ticket to enter": those who are willing to be completely transparent in identity verification, transaction tracking, and tax reporting are the ones eligible to discuss "regulatory friendliness."

What can truly change the industry's landscape is the instruction Trump gave simultaneously to the Federal Reserve—to evaluate whether to open access to federal reserve main accounts and payment system access for crypto and fintech companies. If this step is recognized by the regulatory sphere, only a small number of compliant institutions that undergo strict reviews will hold main accounts, which would allow them to connect directly with central bank payment infrastructure. Given the global emphasis on tax transparency and the accelerated implementation of CRS 2.0 and CARF, these institutions would also be more capable of serving as "visible, reportable" bridges in cross-border capital flows. Conversely, those hoping to escape regulatory scrutiny under the guise of "crypto" will be further marginalized under the new U.S. framework of "open access + strict reporting."

In the context of this executive order, Trump’s advisor on digital assets, Patrick Witt, raised a more symbolic signal: the official announcement of the U.S. Bitcoin strategic reserve is expected to be released in the coming weeks, even though the scale of purchases and legal structure remain deliberately undisclosed. The market interprets this as the expectation of being a "national-level holder"—once sovereign levels are considered important participants, holding the asset itself shifts from being "marginal" to becoming "a national asset," leading to increased regulatory thresholds for compliant institutions to engage with these assets. The country may wave the "Bitcoin reserve" flag, signaling a friendly policy stance with one hand, while using main account access, anti-money laundering standards, and tax reporting requirements to subject qualifying institutions receiving this "national endorsement" to stricter scrutiny. This dual pattern of "endorsement and selection" could likely become the foundation of the U.S. crypto compliance ecosystem in the coming years.

CRS 2.0 and CARF Expand Crypto Reporting

As the U.S. establishes institutional thresholds for "who can participate," CRS 2.0 and CARF are rewriting the game rules globally for "who can still hide." CRS 2.0 is an upgraded version of the existing automatic information exchange framework for cross-border financial accounts, while CARF specifically fills the "blind spot" for crypto assets, central bank digital currencies, and electronic currencies: these two frameworks collectively bring previously off the radar holding accounts into the automatic reporting list of multilateral tax authorities. For global regulators, this means that in the future, leads on cross-border capital will no longer just stem from foreign banks and brokerages, but will extend to centralized trading platforms, custodial institutions, and various licensed electronic money institutions. Hong Kong has announced plans to implement CRS 2.0 and CARF, requiring local crypto exchanges, brokers, and ATM operators to fulfill reporting obligations, thus becoming the first in Asia to formally connect such accounts to the global tax "radar."

Under this new framework, what truly changes is which accounts and transactions are systematically "named" for the first time. Any crypto-related account opened under the name of a regulated intermediary and undergoing identity verification—whether they are exchange spot accounts, custodial wallet accounts, or crypto-related brokerage accounts and electronic money wallets—once located in jurisdictions implementing CRS 2.0 or CARF, their balances and transaction records related to foreign residents are likely to enter the automatic information exchange list. The more cross-border transfer links there are and the more complex the offshore entities involved, the higher the risk that tax authorities will restore the real beneficiaries through multilateral matching. Previous arrangements relying on offshore structures thinking "a layer of shell companies makes it safe" will mean higher compliance costs, more frequent due diligence inquiries, and potential backup tax and interest penalties in the wake of enhanced tax transparency. For institutions and large holders, the realistic choice in this new landscape is to consider "foreign accounts will eventually be exposed" as a base assumption and to redesign capital paths and holding structures in an environment of open access combined with strict reporting.

Pressure on Hong Kong Exchanges to Access CRS 2.0

When Hong Kong announced that it would integrate CRS 2.0 and CARF into its local system, the market quickly realized that this is not just an update of tax form formats, but is intended to formally pull the crypto licensing system into the global automatic information exchange network. According to the design of CRS 2.0 and CARF, financial institutions must conduct due diligence on non-resident accounts and report relevant information to the local tax authorities, which will automatically exchange information among countries according to agreements. Hong Kong's expansion of the definition of "financial institutions" to include crypto exchanges, brokers, and ATM operators means that every non-local customer account, wallet, and transaction flow on licensed platforms may be redefined as reportable subjects rather than being seen as "technical operations regulated locally and unrelated to tax."

The pressure first falls on exchanges and brokers that have already obtained licenses and consider themselves compliant. They now face the need to reconstruct customer classification, tax residency identification, and cross-border reporting processes at a systemic level. Their operational costs have transitioned from merely paying compliance department salaries to investments throughout the entire chain from account opening, risk control, data storage, to reporting interfaces. Even more marginal ATM operators cannot be excluded from this change; previously relying on a "small amount offline, dispersed machines" to maintain a semi-anonymous model, they will be forced to upgrade identity verification and transaction tracking under the due diligence lens of CRS 2.0 and CARF, or risk having to exit the licensed system. From the perspective of regional capital flows, the long-standing path of mainland funds going offshore via Hong Kong and then entering global markets will be equipped with "gates" after this round of rule upgrades: Hong Kong will no longer just be a transit hub, but a pre-selection point designated by the global tax transparency framework, needing to undertake regulatory extensions for Chinese capital while also providing traceable accounts and transaction profiles to overseas tax authorities.

Wallet Choices After the Compliance Gate Closes

As the U.S. reviews the CLARITY Act and issues crypto-friendly executive orders, trying to bring licensed institutions and mainstream funding "inside," global tax authorities are simultaneously raising the fence outside with CRS 2.0 and CARF, forcing institutions and large holders to re-evaluate their wallet models. According to a single source, around 60 addresses that previously held over 10,000 ETH have chosen to close out or nearly clear out in the past two months, which seems more like a preemptive accounting against future tax visibility and cross-border declaration costs rather than just a judgment on price cycles. Also under this tension is AI Financial, which reported a loss of approximately $271.5 million in the first quarter and has been warned of ongoing operational risks; it reminds all crypto-related institutions that under the new framework of "open access + strict reporting," an aggressive risk appetite combined with delayed compliance input can quickly evolve into an operational crisis. Going forward, one side grapples with when U.S. crypto legislation and executive orders will materialize and how specific terms will delineate the boundaries of "compliant wallets," while the other side sees CRS 2.0 and CARF being continuously promoted globally, making the inclusion of cross-border addresses and accounts into automatic information exchange a high-probability event. Funds must find a new balance between "enjoying U.S. regulatory dividends" and "accepting global tax transparency." For project teams, the treasury is no longer just about which chains the funds are scattered across and what protocols are used to earn returns, but needs to allocate budgets for tax filing and auditing, choosing custodians and banks willing to connect with the CRS 2.0/CARF framework; for platforms, licensing, identity verification, and reporting capabilities will become core variables distinguishing "sustainable business" from "subjects likely to be eliminated," making it increasingly difficult to claim compliance while simultaneously catering to anonymous traffic; for individual users, the more pressing issue is no longer which on-chain address to use, but rather deciding how much they are willing to trade identity transparency and full tax reporting for the long-term participation qualification in the mainstream financial and compliant crypto ecosystem before U.S. legislation takes effect and global information exchange becomes fully deployed.

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