Hong Kong’s proposed crypto-asset declaration framework bill has moved to the bills committee review stage, signaling the city’s intent to tighten oversight of digital asset transactions while pushing forward with regulated stablecoins. The Crypto-Asset Reporting Framework (CARF) bill, introduced in late May 2026, is now under active examination by a Legislative Council committee, which will scrutinize its provisions before any floor vote.
The bill aims to establish a reporting mechanism that requires licensed crypto platforms operating in Hong Kong to collect and share tax-residency information on users. According to lawmaker Priscilla Leung, the legislation follows a compliance structure similar to the recently amended Tax Ordinance, which passed on June 17. Under the proposed rules, platforms must identify reportable users, gather documentation verifying tax jurisdictions, and register with the Inland Revenue Department. They will also be obligated to maintain detailed records even if they cease operations. All reporting entities must create an account with the tax authority by January 31 each year, and the framework is set to take effect on January 1, 2027, with the first automatic exchange of information occurring in 2028. The government expects to add about 8,000 financial institutions to the reporting system, though most are likely to file nil returns.
The review stage is procedural and does not guarantee passage; the bill could undergo substantial changes based on committee recommendations and public consultation. Officials emphasize the framework aligns with the international CARF standard for automatic exchange of tax-relevant crypto-asset data, positioning it as a transparency measure rather than a market access barrier. This approach reinforces Hong Kong’s regulate-and-integrate strategy, which has seen the city issue exchange licenses and advance stablecoin pilots over the past two years.
In parallel, the Hong Kong Monetary Authority (HKMA) has granted the first regulated stablecoin licenses to the Hongkong and Shanghai Banking Corporation (HSBC) and Anchorpoint Financial Limited, a joint venture backed by Standard Chartered, Hong Kong Telecom, and Animoca Brands. Both entities plan to issue stablecoins pegged to the Hong Kong dollar, with HSBC aiming to integrate its stablecoin into the PayMe mobile app. HKMA Chief Executive Eddie Yue noted that licensees, selected from 36 applicants, will initially focus on cross-border payments, local payments, and tokenized asset trading. Market entry is expected between mid-2026 and year-end.
Additionally, the Financial Services and the Treasury Bureau and the Securities and Futures Commission recently concluded a consultation on licensing virtual asset advisory and management services. The proposal would create new licenses with minimum liquid capital requirements of HK$100,000 for advisory firms and HK$3 million for those holding client assets, alongside a HK$5 million paid-up share capital threshold. These moves, together with the CARF bill, underscore Hong Kong’s effort to balance crypto-market innovation with robust regulatory guardrails, mirroring trends in other jurisdictions such as the U.S. SEC and CFTC’s recent focus on portfolio margin rules for digital assets.
