December 11, 2025
By Anjali Kochhar
Hong Kong has launched a public consultation on a major regulatory overhaul that aims to strengthen tax reporting for crypto assets. The proposal would align the city with the OECD’s Crypto Asset Reporting Framework (CARF) and upgrade its existing Common Reporting Standard, expanding automatic information exchange to include activities involving digital assets.
If adopted, the new rules would require financial institutions and crypto-related service providers to report user transaction data to Hong Kong’s tax authorities. This information would then be shared automatically with other participating jurisdictions. The government has indicated that cross border information exchange under CARF could begin as early as 2028, with full implementation of the revised Common Reporting Standard expected in 2029.
Officials say the initiative is essential for maintaining Hong Kong’s position as a trusted global financial hub at a time when the crypto sector continues to expand. The proposed framework is designed to enhance transparency, reduce opportunities for tax evasion, and ensure that digital asset activities comply with international tax cooperation standards. Christopher Hui, the Secretary for Financial Services and the Treasury, noted that strengthening tax reporting obligations for crypto assets is necessary to support global efforts to combat tax fraud and cross border evasion.
The consultation paper outlines several significant updates to existing regulations. These include mandatory registration requirements for institutions dealing in crypto assets, enhanced due diligence and record keeping standards, and broader reporting obligations covering various crypto transactions. The government has also proposed stricter enforcement mechanisms, including increased penalties for non compliance.
The planned legislative changes would be incorporated into Hong Kong’s Inland Revenue Ordinance. Members of the public, industry experts, and financial institutions are invited to submit feedback on the proposals before the consultation period closes on 6 February 2026.
The move comes at a time when Hong Kong’s digital asset ecosystem is gaining momentum. Interest from institutional investors has grown, and regulated exchanges in the region have begun taking steps toward public listings. The proposals signal Hong Kong’s intention to regulate crypto markets with a balance of innovation and compliance, ensuring that the city’s financial system remains competitive while meeting global standards.
With the consultation now open, the direction of Hong Kong’s crypto regulatory landscape lies partly in the hands of the public. The coming months will determine how the city balances innovation with accountability in a rapidly evolving digital economy.
About the author
Anjali Kochhar covers cryptocurrency and blockchain stories in India as well as globally. Having been in the field of media and journalism for over four years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.
