Hong Kong Introduces Crypto Reporting Framework Ahead of Regulated Stablecoin Launch

Hong Kong is set to introduce a new crypto-asset reporting framework (CARF) that will require licensed platforms to collect and share tax-residency data on their users. This move comes ahead of the launch of the country's first regulated stablecoins, which are expected to hit the market between mid-2026 and the end of the year.

The CARF bill is currently being reviewed by lawmakers and will require platforms to identify users who need to be reported to tax authorities, gather documents showing where users pay taxes, and register with the government. Reporting platforms must also create an account with the tax department by January 31 each year and keep detailed records, even if the business closes down.

The rules are set to start on January 1, 2027, with the first information exchange happening in 2028. The government plans to add about 8,000 more financial institutions to the reporting system, but most of them will likely file empty returns.

The launch of regulated stablecoins is seen as a significant development for Hong Kong's crypto market, with HSBC and Anchorpoint Financial Limited having been granted licenses by the Hong Kong Monetary Authority. These issuers plan to focus on areas like cross-border payments, local payments, and tokenized asset trading due to their strong banking backgrounds.