Hong Kong on Dec. 9, 2025, opened a public consultation to implement the Crypto-Asset Reporting Framework (CARF) and update its Common Reporting Standard (CRS), a move intended to strengthen international information sharing and curb tax fraud in digital assets. The consultation sets a timetable to begin exchanging crypto tax data from 2028 and targets a full operational rollout by 2029.
CARF scope, reporting obligations and market impact
The Crypto-Asset Reporting Framework (CARF) is an OECD standard that mandates the automatic exchange of tax-relevant information on crypto-assets between jurisdictions. Under the proposed Hong Kong measures, Crypto-Asset Service Providers (CASPs) — including exchanges, brokers, wallet providers and entities tied to decentralized finance and NFT marketplaces — would be required to register, collect, verify and report detailed customer and transaction data.
Reportable activity is broad and covers crypto-to-fiat trades, crypto-to-crypto transactions and transfers of relevant crypto-assets, aiming to close a transparency gap between traditional finance and digital markets. Hong Kong pairs CARF with updates to its CRS to align with global tax-governance trends and to integrate digital-asset markets into the international financial system while preventing regulatory arbitrage. Several other jurisdictions are advancing similar timetables or regulations, illustrating an international shift toward routine cross-border exchange of crypto tax data.
CASPs operating in or entering Hong Kong will face higher compliance costs and operational complexity as they implement systems for data collection and reporting comparable to those in traditional finance. Firms should expect investments in customer identification, transaction monitoring and secure reporting pipelines as compliance becomes a core operational requirement. For institutional investors, the enhanced transparency is likely to reduce perceived risks linked to illicit finance and, in turn, improve confidence in deploying larger capital allocations into tokenized markets.
For individual taxpayers the consultation clarifies visibility rather than tax rates: Hong Kong currently applies 0% capital gains tax to occasional, long-term crypto holdings while profits from frequent or professional trading are subject to profits tax of about 15%–16.5%. CARF will increase tax authorities’ ability to detect and assess crypto-related income and gains but does not itself change tax rates.
The expanded collection and exchange of user data also raises privacy and security concerns that the consultation process must address. Authorities will need to specify safeguards for data protection, storage and cross-border transmission to mitigate risks to users and maintain market trust.
Hong Kong’s consultation signals its intent to marry digital-asset growth with global tax transparency. The proposed framework makes compliance and information reporting central pillars of the city’s digital-asset ecosystem.