Tax reporting for cryptocurrencies worldwide still faces significant challenges, and tokenized stocks could be the trigger that prompts the system to modernize.
Recently, services such as Robinhood and Gemini have begun offering tokenized stocks to users within the European Union. These blockchain-based instruments replicate the prices of actual stocks like Apple and Tesla, enabling 24/7 trading without the constraints of standard market hours.
This development might seem like a significant step toward increased accessibility and innovation. However, if these offerings gain more popularity, and companies like Galaxy Digital anticipate they will divert liquidity from traditional markets, regulatory bodies will feel increased pressure to address the reporting discrepancies between crypto platforms and conventional brokers.
Despite advancements over the years, crypto tax reporting remains considerably behind that of traditional asset exchanges globally.
The gap is evident. In Australia, for example, the Australian Stock Exchange (ASX) provides the tax office with organized data, such as sale prices, dates, and proceeds, which are automatically pre-filled into users’ tax returns.
In contrast, the Australian Taxation Office (ATO) adopts a more relaxed approach for crypto, offering a notification to remind taxpayers to review taxable events instead of providing detailed pre-filled reports. While the ATO is aware of an individual’s activity in the crypto space due to exchange reports of account ownership, it lacks the comprehensive oversight seen in stock trading.
This leniency may have been acceptable during crypto’s infancy, when most transactions involved speculative tokens or NFTs. However, as platforms aim to globally expand their tokenized stock offerings — not yet available in Australia but likely under consideration — the lack of tax transparency becomes increasingly indefensible.
Governments can’t afford to overlook potential tax revenues simply because transactions occur on the blockchain. As tokenized stocks gain more traction in the coming months, I believe regulators will rush to prepare.
In the United States, the IRS is already working to catch up. New crypto reporting regulations, including the much-anticipated Form 1099-DA, are expected to be implemented in 2026, requiring crypto brokers to report transactions similarly to traditional financial institutions.
Meanwhile, reports suggest Robinhood is planning to introduce tokenized stocks to U.S. customers.
This raises a pertinent question: will this launch coincide with the new IRS mandates?
Globally, the OECD’s Crypto-Asset Reporting Framework (CARF), also set for 2026, will mandate cross-jurisdictional transaction data sharing, akin to the Common Reporting Standard used by banks.
If tokenized stocks are intended to emulate real equities, the tax reporting associated with them must align accordingly.
The era of cryptocurrencies operating in a regulatory gray area is nearing its end. Whether platforms are prepared or not, the age of complete tax transparency is approaching, and tokenized stocks could be the catalyst driving this change.
I anticipate this shift will occur within the next five years.
