Hong Kong Pushes 2028 Crypto Tax Data Auto-Exchange With CARF Adoption

Hong Kong has launched a public consultation on adopting the OECD's Crypto-Asset Reporting Framework (CARF) and updating the Common Reporting Standard (CRS). The initiative aims to integrate cryptocurrencies into global tax transparency systems and strengthen cross-border financial reporting. The government seeks to begin automatic exchange of crypto tax data with partner jurisdictions by 2028, with full implementation of the updated framework planned for 2029. The consultation period, open until February 6, 2026, reflects Hong Kong's effort to maintain its status as a reputable international financial hub according to financial reports.

Christopher Hui, Secretary for Financial Services and the Treasury, emphasized that the proposed changes align with international tax cooperation standards and aim to combat cross-border tax evasion. Under the new rules, financial institutions will face stricter reporting obligations, mandatory registration requirements, and stronger enforcement mechanisms as reported by financial analysts.

The authorities are also considering higher penalties for non-compliance, a move expected to enhance oversight and deter misconduct according to market analysts.

Strengthening Cross-Border Compliance

The consultation paper outlines legislative proposals and implementation details for CARF and the updated CRS. It explains how reporting entities will be required to follow revised procedures for record-keeping, verification, and data handling. Hong Kong's goal is to ensure compliance with the OECD's peer review process, which assesses the effectiveness of its tax reporting systems. The city plans to complete local legislative amendments by 2025, paving the way for the automated exchange of information with partner jurisdictions starting in 2028 as announced by government officials.

Only jurisdictions that meet strict confidentiality and data security standards will be included in the reciprocal reporting network according to financial analysts. This approach is intended to maintain the integrity of the system while encouraging broader participation from international partners. The government has also emphasized the importance of public feedback, which will guide the final implementation of the new rules according to official statements.

Broader Implications for Hong Kong's Crypto Ecosystem

The consultation comes at a time when Hong Kong's crypto market is gaining momentum. HashKey Holdings, one of the city's leading licensed crypto platforms, is preparing for an IPO that could value the company at around $2.47 billion. The move signals Hong Kong's commitment to developing a regulated digital-asset market that can compete with global hubs like Singapore and Dubai according to industry analysts. At the same time, the city is also drawing interest from regional players, with reports indicating that Thai exchange Bitkub is exploring a funding round and potential listing in Hong Kong by 2026.

The rollout of CARF and the HashKey IPO both highlight Hong Kong's strategic push to attract institutional players and differentiate itself from unregulated offshore exchanges as reported by financial analysts. Regulators have also signaled plans to relax certain restrictions for crypto trading platforms, including allowing regulated firms to share global order books with overseas affiliates. These steps are expected to improve liquidity and align local markets with international trading flows as noted in market reports.

Market Reactions and Investor Considerations

The timing of the tax consultation has sparked discussions among market participants about the potential impact on Hong Kong's crypto industry. While the city has granted licenses to 11 exchanges since 2020, it has yet to attract major global platforms such as Binance or Coinbase according to financial analysts. The new tax reporting rules could add to compliance costs for local operators, but they also reinforce the city's reputation as a transparent and well-regulated market as reported by market observers.

Investors are watching closely how these developments affect Hong Kong's appeal as a hub for digital assets. The city's crypto-focused exchange-traded funds have drawn modest inflows compared to their U.S. counterparts, indicating that further growth may depend on institutional adoption according to industry reports. Meanwhile, the success of HashKey's IPO will serve as a test of market demand for regulated crypto platforms as expected by market analysts. The outcome could influence future regulatory approaches and shape the trajectory of Hong Kong's digital-asset sector.