TL;DR
- Hong Kong has launched a public consultation to implement the CARF and update the CRS, aiming to align crypto oversight with international standards.
- The city plans to begin the automatic exchange of crypto-asset data in 2028.
- CARF already involves 76 committed countries and 53 signatories of the Multilateral Competent Authority Agreement (MCAA), strengthening tax cooperation and Hong Kong’s financial standing.
Hong Kong has initiated a public consultation to implement CARF and update the CRS, in an effort to align cryptocurrency oversight with global transparency standards.
The consultation seeks feedback on the technical implementation of CARF, the necessary updates to local regulations, and potential transitional measures to help reporting entities adapt without disrupting existing operational workflows.
Automated Global Exchange of Crypto Transactions
Since 2018, Hong Kong has been automatically exchanging financial information with selected partner jurisdictions under the CRS, and CARF extends this framework to include crypto-asset transactions. Integrating both frameworks will allow digital asset data sharing to be incorporated into established financial reporting systems, ensuring continuity and compliance with international expectations.
The Hong Kong government plans to complete the required local legislative amendments between 2026 and 2027. The automatic exchange of information with partner jurisdictions is set to begin in 2028, while the updated CRS will come into effect in 2029. Implementation will be reciprocal and require partners to meet data confidentiality and security standards, safeguarding the exchanged information.
CARF has gained global importance: 76 countries have committed to sharing crypto-asset data, and 53 have already signed the MCAA, which enables automatic information exchange. Adoption timelines vary by jurisdiction; Brazil is considering participation, Switzerland postponed implementation until 2027, and the U.S. targets 2029. This global coordination reflects the need to adapt regulatory tools to the growth of digital markets.
Hong Kong Strengthens Its Role as an International Financial Center
The framework would not cover entities that solely hold crypto, such as protocol treasuries, investment funds, or passive foundations. This has raised questions about the scope of reporting requirements and the reach of CARF. In the Cayman Islands, for example, foundation registrations grew 70% year-on-year.
Secretary for Financial Services and the Treasury, Christopher Hui, emphasized that implementing CARF and the CRS will reinforce Hong Kong’s reputation as an international financial center and improve global tax cooperation. Reforms will include mandatory registration for financial institutions, stricter penalties, and enhanced enforcement mechanisms, ensuring the city maintains favorable ratings in OECD peer reviews
