Hong Kong Moves Toward Global Crypto Information Sharing to Strengthen Tax Compliance
Hong Kong has opened a public consultation on adopting an international system for sharing information on crypto assets, marking a significant step in the city’s strategy to develop a regulated digital asset environment while reinforcing tax transparency. The initiative aligns Hong Kong with global efforts to curb tax fraud and cross border evasion as digital asset activity continues to grow.
According to a government statement, the consultation seeks public input on implementing the Crypto Asset Reporting Framework, known as CARF, as well as updates linked to the Common Reporting Standard established by the Organisation for Economic Co operation and Development. CARF is designed to ensure that jurisdictions exchange information on crypto transactions in the same way they currently share data on traditional financial accounts. Its goal is to prevent individuals from using digital assets to hide wealth or move funds without tax authorities being aware.
Christopher Hui, Hong Kong’s secretary for Financial Services and the Treasury, said that adopting the framework is essential for maintaining the city’s reputation as a leading financial hub. Hui explained that Hong Kong’s commitment to international tax cooperation requires updating the Inland Revenue Ordinance to reflect global standards. He noted that credibility and regulatory alignment are increasingly important as the city positions itself as a center for digital asset development.
Hui said the government considers compliance with OECD rules to be of paramount importance, especially as competition increases among financial hubs that aim to attract responsible crypto innovation. Ensuring transparent reporting practices, he added, will help prevent illicit financial flows and strengthen trust in Hong Kong’s regulatory ecosystem.
The launch of the consultation comes as Hong Kong intensifies efforts to build a balanced regulatory structure for virtual assets. The city has introduced licensing requirements for crypto exchanges, issued guidelines for stablecoin supervision and encouraged banks to support compliant digital asset firms. Officials say that international cooperation is the next logical step as the industry becomes more interconnected.
Under CARF, entities that handle crypto transactions, including exchanges and certain wallet providers, would be required to report customer information and details of transactions to local tax authorities. That information may then be exchanged with other jurisdictions under bilateral or multilateral agreements. Analysts say that such measures could close loopholes that currently allow individuals to move assets across borders without proper tax declaration.
Industry participants generally expect more rigorous reporting requirements but believe the framework may help legitimize the sector by aligning it with established global financial practices. Some legal experts say the new rules will require firms to upgrade data management systems and integrate compliance tools capable of tracking diverse types of crypto activity. Others note that the clarity provided by CARF could make Hong Kong a more attractive base for companies seeking regulatory certainty.
The government will consider feedback from the consultation before finalizing amendments to the Inland Revenue Ordinance. Officials say they aim to move quickly so that Hong Kong remains in step with international standards as the OECD encourages jurisdictions to begin adopting CARF over the coming years.
