There is still a major crack in the reporting of global crypto taxes. Tokenized inventory could be a catalyst that forces the system to catch up.
In recent weeks, platforms like Robinhood and Gemini have begun offering symbolic stocks to European Union users. These blockchain-based derivatives mimic the prices of real stocks, such as Apple and Tesla, allowing users to trade 24/7, 7 days a year, from traditional market time limits.
It may sound like moving forward for accessibility and innovation. But if these products continue to gain traction and companies like Galaxy Digital believe they will suck up liquidity from traditional exchanges, regulators will face increasing pressure to bridge the reporting gap between crypto platforms and traditional brokers.
Despite the years of advances made by the crypto industry, crypto tax reporting is still far behind traditional asset exchanges in many parts of the world.
There is still a clear gap. I'll take Australia. The Australian Stock Exchange (ASX) provides structured data to the tax office, including sales prices, dates and revenues.
In the case of crypto, the ATO approach is like a gentle tap on the shoulder to taxpayers. Presents notifications that remind users to check for taxable events rather than detailed, pre-filled reports. The ATO knows you are active in crypto as the crypto exchange reports you have an account, but there is no comprehensive surveillance as a stock trading.
That approach may have been justified in the early days of Crypto, when most activities were tied to speculative tokens or NFTs. But now, the platform may want to expand its tokenized stock offerings globally – although it is not yet available in Australia but says it is being considered, the lack of tax transparency is much more difficult to justify.
The government cannot afford to slip through the cracks just because it is on-chaining potential tax revenue. As tokenized stocks begin to gain more and more attention over the coming months, we believe regulators are in a hurry to get them ready.
In the US, the IRS has already caught up. New cryptographic reporting rules, including the much-anticipated Form 1099-DA, are set to take effect in 2026. These require a crypto broker to report user transactions similar to traditional financial institutions.
Meanwhile, Robinhood is reportedly preparing to launch tokenized stocks for its US customers.
It raises a timely question… Does it match the new IRS requirements?
Globally, the OECD Cryptographic Asset Reporting Framework (CARF) implements transaction data sharing across jurisdictions, just like how banks adhere to common reporting standards.
If tokenized stocks mimic real stocks, the tax data reported around them must match accordingly.
Numbered in the age of cryptography that exists in the regulatory grey zone. Whether the platform is ready or not, there is an era of full tax transparency, and tokenized inventory could be the turning point that forces it into reality.
I think that moment will arrive within the next five years.
