What is the status of electronic money providers for CRS purposes?
“No special rules apply to electronic money providers. Like other participants of the financial industry, they must determine whether they are a Financial Institution (FI), as defined by the CRS (Common Reporting Standard). That determination will depend on the facts and circumstances; e.g., in order to determine whether an electronic money provider is a Depository Institution, the analysis must be made with reference to Section VIII(A)(5) and the related Commentary, in particular paragraph 13”.
Section VIII(A)(5) states that the term “Depository Institution” means “Any Entity that accepts deposits in the ordinary course of banking or similar business”. Commentary on Section VIII para 13, page 161 clarifies, that an Entity is considered to be engaged in a “banking or similar business” if, in the ordinary course of its business with customers, the Entity accepts deposits or other similar investments of funds and regularly engages in one or more of the following activities: a) making personal, mortgage, industrial, or other loans or provides other extensions of credit; b) purchasing, selling, discounting, or negotiating accounts receivable, instalment obligations, notes, drafts, checks, bills of exchange, acceptances, or other evidences of indebtedness; c) issues letters of credit and negotiates drafts drawn thereunder; d) provides trust or fiduciary services; e) finances foreign exchange transactions; or f) enters into, purchases, or disposes of finance leases or leased assets.
An Entity is not considered to be engaged in a banking or similar business if the Entity solely accepts deposits from persons as a collateral or security pursuant to a sale or lease of property or pursuant to a similar financing arrangement between such Entity and the person holding the deposit with the Entity.
Source: OECD FAQ April 2017 and CRS Standard
A key aspect of the CRS and its reporting requirement is to ensure the “correct scope“ of FIs that are required to collect and report the information. These FIs are obliged to collect information on their account holders and then report this information annually. Any bitcoin investor and persons trading on an exchange platform may need to take into consideration that information on them and their investments might be disclosed under both CRS and FATCA regimes soon.