Hong Kong is moving to widen its crypto tax reporting regime, with roughly 8,000 additional financial institutions expected to fall under the system. Under the proposed Crypto Asset Reporting Framework, or CARF, licensed crypto platforms would be responsible for identifying which users are reportable, collecting and verifying documents that show each user’s tax residency, and registering with the relevant public authorities.
Licensed platforms would need to verify tax residency data
The bill says all reporting platforms must set up an account with the tax department by January 31 each year. The obligation to keep detailed records would remain in place even if a platform stops operating. In a column published on June 26, Hong Kong lawmaker Priscilla Leung said the proposal closely resembles the tax information exchange regime adopted on June 17. The framework would make it mandatory for licensed crypto platforms to collect, verify, and join the official system for users’ tax residency information.
The implementation schedule is already outlined. The rules are due to take effect on January 1, 2027, while the first international exchange of information is planned for 2028. CARF is a crypto asset reporting standard developed by the Organisation for Economic Co-operation and Development, aimed at creating more systematic cross-border information sharing among tax authorities. The government expects most of the newly covered institutions to submit nil returns.
Timeline for regulated stablecoins is also coming into focus
Hong Kong’s broader digital asset rulebook is taking shape at the same time. The city’s first regulated stablecoins are expected to launch between mid and late 2026. The Hong Kong Monetary Authority has granted stablecoin licenses to a joint venture formed by HSBC, Standard Chartered, Hong Kong Telecom, and Animoca Brands under the name Anchorpoint Financial.
According to the report, the two consortia were selected from a field of 36 applicants, and both intend to issue stablecoins pegged to the Hong Kong dollar. HSBC had previously said it wanted to integrate its stablecoin with its mobile payments app PayMe. HKMA Chief Executive Eddie Yue said the newly licensed issuers, supported by banking infrastructure, would concentrate on cross-border and domestic payments as well as tokenized asset transactions.
Separate licensing tracks proposed for advisory and portfolio services
Hong Kong is also pressing ahead with another regulatory package. The Financial Services and Treasury Bureau and the Securities and Futures Commission recently completed a one-month consultation on licensing for virtual asset advisory and portfolio management services. The proposal creates separate license categories for firms giving virtual asset investment advice and firms managing virtual asset portfolios.
The capital thresholds are spelled out. Companies that provide transaction advice or market analysis without holding client assets would need at least HK$100,000 in liquid capital. Firms that oversee client assets would face a minimum paid-up capital requirement of HK$5 million and liquid capital of HK$3 million.