Over the past decade, digital assets have transitioned from an emerging technological innovation to a trillion-dollar financial ecosystem. However, due to the decentralized nature of these assets, pseudo-anonymous mechanisms, and the ability to transfer across borders without traditional intermediaries, this new asset class has long remained outside the core focus of global tax regulation. The traditional Common Reporting Standard (CRS) is designed around financial accounts and struggles to adequately address the unique characteristics of cryptocurrency, which has led to regulatory lag and potential risks related to base erosion and profit shifting.

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To address this regulatory gap in the cryptocurrency space and respond to the structural trend of accelerating digital asset mainstream adoption, the Organisation for Economic Co-operation and Development (OECD) published the Crypto-Asset Reporting Framework (CARF) in 2022. The core objective of CARF is to establish a standardized reporting and automatic information exchange mechanism with international credibility, expanding the scope of global tax transparency governance from traditional financial accounts to cover crypto asset activities with investment or payment functions.

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The global regulatory consensus has quickly spread to key financial markets, and Hong Kong, as a financial center committed to enhancing its Web3 competitiveness, has taken substantial steps in response. On December 9, 2025, the Hong Kong Special Administrative Region (HKSAR) government officially launched a public consultation on implementing CARF, clearly outlining the local compliance timeline. The plan is to complete necessary legislative revisions by 2027, with the goal of starting the automatic exchange of cryptocurrency-related tax information with partner jurisdictions by 2028. This move is not only a necessary step for Hong Kong to fulfill its international tax obligations, but also a key milestone in strengthening its reputation as a global financial center while improving the regulatory framework for virtual assets.

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This report, as the opening piece of a deep dive into CARF, aims to provide a comprehensive overview with both a macro perspective and practical insights for crypto asset service providers (CASPs, with eligible entities being recognized as RCASPs under CARF), traditional financial institutions, high-net-worth investors, and other market participants. The report will systematically outline the core logic and global implementation paths of CARF, and focus on analyzing its impact on the industry ecosystem, compliance cost management, and the privacy boundaries for users. For market participants, proactively positioning for CARF compliance is no longer merely a "compliance baseline" but an important lever for building trust capital and establishing long-term competitive advantages in a high-standard compliance-driven market.

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Download the report in PDF (Chinese)