Hong Kong tightens crypto rules: Licensing and tax reforms

Hong Kong advances crypto regulation with new stablecoin licensing, a crypto asset reporting framework, and enhanced oversight, including tax transparency and warnings against suspicious trading platforms.

Hong Kong is strengthening its digital asset regulatory framework through several major initiatives. The Financial Services and the Treasury Bureau plans to introduce legislative proposals for a crypto asset reporting framework and common reporting standards, targeting automatic tax information exchange with other jurisdictions by 2028. The Stablecoin Ordinance has come into effect, with the Hong Kong Monetary Authority now reviewing license applications from stablecoin issuers. These issuers must maintain 100% reserve backing and ensure the separation of reserve assets. Broader regulations covering virtual asset trading, custody, advisory, and management services are also set to be submitted to the Legislative Council this year. Authorities have also introduced a comprehensive cryptocurrency tax framework and mechanisms for international tax information exchange. Meanwhile, the Securities and Futures Commission has updated its Alert List to warn the public about suspicious virtual asset trading platforms and entities suspected of fraud or misuse of licensing claims.