Hong Kong Launches Public Consultation on Global Crypto Reporting Framework
Hong Kong has launched a public consultation on implementing the international Crypto Asset Reporting Framework (CARF). The initiative comes as governments worldwide reshape their tax reporting systems for digital assets.
The consultation, announced on Tuesday, seeks feedback on CARF’s technical rollout and related local tax reporting updates. This forms part of Hong Kong’s broader effort to align crypto oversight with global transparency standards.
The move builds on Hong Kong’s existing practice of exchanging financial account information with partner jurisdictions annually since 2018. Rather than signaling a new direction, it represents continued alignment with international cooperation efforts.
Key developments in global CARF adoption include:
- Seventy-six governments have pledged to share crypto data under CARF
- Fifty-three countries have signed the agreement enabling automatic exchange
- Switzerland delayed its timeline while the US continues its internal review
The consultation also invites feedback on transitional arrangements. These could help reporting entities adjust to new requirements without disrupting existing compliance systems.
Integration with Existing Financial Reporting Systems
The consultation examines how CARF would operate alongside the Common Reporting Standard. This Organisation for Economic Co-operation and Development initiative already shapes international tax reporting.
By reviewing both frameworks together, Hong Kong seeks to integrate crypto data sharing into established systems. The process reflects growing coordination between jurisdictions as digital asset markets expand.
Global Momentum Builds for CARF Implementation
CARF has gained significant traction worldwide. In early November, 47 governments issued a joint pledge to adopt the framework quickly. Brazil has also reportedly considered joining the program.
However, implementation timelines vary across jurisdictions. Switzerland postponed its adoption until 2027 and continues assessing data exchange partners. Meanwhile, the US reviewed an Internal Revenue Service proposal linked to CARF participation.
According to an OECD list updated December 4, 48 nations plan CARF adoption by 2027. Another 27 countries target 2028, while the US aims for 2029.
A separate OECD document confirms 53 countries have signed the Multilateral Competent Authority Agreement. This provides the legal foundation for automatic information exchange.
Cayman Islands Registrations Surge Amid Reporting Changes
Recent data shows a 70% annual increase in Cayman Islands foundation company registrations. Legal professionals at Walkers noted that CARF likely excludes certain structures.
These exemptions may include entities that solely hold crypto assets, such as protocol treasuries, investment funds, or passive foundations. This raises questions about how some entities might remain outside the data sharing framework as international reporting rules develop.
