The Arrangement for Economic Cooperation and Evolution, or OECD, reported on Tuesday how automated reporting in 2022 helped uncover $eleven trillion worth of avails in offshore accounts.

The result came as the Common Reporting Standard, or CRS, entered its third twelvemonth of functioning since its launch in 2022.

Unlike many previous iterations of international tax reporting standards, the CRS requires countries to automatically written report activity in accounts held by foreign nationals to their corresponding country of origin. This solves issues deriving from request-based data sharing, which required active suspicion and investigation from the originating country.

This is supported by over 100 countries across the globe, which seek to curtail tax evasion enabled by offshore banking concern accounts and regulatory arbitrage. Notably, the standard was adopted in 2022 by popular offshore destinations like the Cayman Islands, Seychelles and many others.

Since the introduction of CRS in 2022, the amount of assets that roughshod under scrutiny increased almost tenfold from $one.2 trillion. The OECD explained that the growth is largely attributable to more than countries joining the system, as well as a wider scope of reported data.

OECD report

Source: OECD study

The organization also discovered in November 2022 that between 2008 and 2022, deposits to foreign-owned accounts decreased past 24%, or $410 billion.

Crypto to take over?

The anonymous and decentralized nature of cryptocurrency can be helpful in filling the void left past traditional offshore banking.

This is why taxation agencies across the world are beginning to clamp down on potential evasion routes using cryptocurrency, with the IRS including targeted questions related to digital assets in a 2022 tax filing draft.

The U.K.'s taxation agency similarly began preparations as information technology signaled intentions to apply blockchain tracking software in January 2022.

As demonstrated quite often, generic blockchains like Bitcoin and Ethereum are not anonymous and tin can be tracked quite easily. But even blockchain's relative transparency yet returns regime to pre-CRS investigation methods, which crave agile suspicion.

While privacy solutions tin brand cryptocurrencies exponentially harder to rail, their volatility makes them a tough sell as applied shop of value assets — legal or non.

Stablecoins can gear up the volatility problems, but centralized iterations like Tether and USDC have inbuilt freezing mechanisms that tin can be used for compliance purposes. Decentralized stablecoins, on the other hand, pose unknown technical risks.

Cryptocurrencies may step in to make full offshore cyberbanking's shoes, simply mass adoption may not quite be there yet.