Hong Kong CRS 2.0: Crypto Assets Now Covered, and How to Respond (Part 1)

Hong Kong has started the legislative process for CRS 2.0, which brings crypto assets and digital finance into the automatic exchange of tax information. This first part of the series explains why CRS 2.0 was introduced and the three key changes it makes. They matter to you if you hold crypto assets or offshore structures, or are tax resident in more than one place.

Where the CRS 2.0 bill stands in Hong Kong

On March 27, 2026, the Hong Kong SAR Government gazetted the Inland Revenue (Amendment) (Automatic Exchange of Information) Bill 2026. On April 1 the bill received its first reading in the Legislative Council, which started the legislative process for CRS 2.0, the updated Common Reporting Standard.

CRS 2.0 is an upgraded tax transparency standard promoted by the Organisation for Economic Co-operation and Development (OECD). Its core change is to bring crypto assets and digital finance into the information exchange, closing a regulatory gap in digital finance.

The new rules take effect in stages from January 1, 2027. They will have a far-reaching impact on high-net-worth individuals, cross-border businesses, financial institutions and crypto-asset service providers.

Why CRS 2.0 was introduced

The OECD launched the Common Reporting Standard (CRS) in 2014 to fight cross-border tax evasion through the automatic exchange of financial account information between jurisdictions. Hong Kong joined in 2016 and has built an exchange network with more than 120 countries and regions.

With the rise of crypto assets and the digital economy, however, the blind spots of the original CRS became clear:

• stablecoins, non-fungible tokens (NFTs) and crypto derivatives had never been reportable
• multi-layered offshore structures let beneficial owners stay hidden

To keep pace with the OECD’s second round of international tax reviews and protect Hong Kong’s reputation for compliance, the SAR Government began this amendment. Offshore centres such as the Cayman Islands and the British Virgin Islands (BVI) already implemented CRS 2.0 on January 1, 2026, and Hong Kong is keeping pace with international practice.

Change 1: crypto assets come under the rules

The new rules add the Crypto-Asset Reporting Framework (CARF) on top of the CRS. Coverage includes:

• fungible tokens (Bitcoin, Ethereum and others)
• qualifying NFTs
• crypto derivatives
• stablecoins
• central bank digital currencies
• specified electronic money products

Reporting is done by crypto-asset service providers, such as trading platforms, brokers and crypto ATM operators. They must meet know-your-customer (KYC) and reporting obligations.

Investment entities such as funds and trusts that hold crypto assets indirectly are also subject to due diligence.

Change 2: deeper look-through to the people in control

Financial institutions must look through to the natural persons who hold more than 25% of an entity (the ultimate controlling persons), so shell companies and multi-layered structures can no longer hide who is behind them.

Holding companies with no real operations (passive non-financial entities) move from a form-based review to a check of their actual business substance.

Financial institutions must also report these new items:

• the date the account was opened
• whether it is a joint account
• the role of each equity holder
• annual transaction flows and income details
• whether the account is new or pre-existing

They must keep monitoring pre-existing accounts and update customer identity information regularly.

Change 3: dual tax residents are reported to every jurisdiction

The new rules remove an option that dual tax residents used to have:

Rule	Until now	Under the new rules
Self-certification	A dual tax resident could choose to be reported to only one jurisdiction	All jurisdictions of residence must be listed
Reporting	Information went to the one jurisdiction chosen	Financial institutions report to every relevant jurisdiction at the same time

Part 2 of this series sets out Hong Kong’s timeline and who is directly affected. If you hold crypto assets or offshore companies, or are tax resident in more than one place, a consultant can help you understand where you stand before the rules take effect.