Hong Kong’s racing to the frontlines of crypto regulation.
Hong Kong is stepping up its game in the world of crypto by aligning with the European Union’s standards for over-the-counter (OTC) crypto derivatives reporting.
In a joint statement on September 26, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) announced plans to overhaul their reporting requirements, taking a cue from the European Securities and Markets Authority (ESMA).
The shift comes after a consultation paper from March 2024 highlighted the challenge Hong Kong stakeholders and investors face when trying to classify crypto OTC derivatives under traditional asset classes like interest rates, foreign exchange, and equities.
Also Read: Hong Kong’s Bitcoin ETFs: A Far Cry From US Success
To stay competitive, local stakeholders urged the adoption of Digital Token Identifiers (DTI), which ESMA has already rolled out across Europe as a key reference for crypto-asset reporting.
Hong Kong regulators are now following suit, confirming plans to integrate DTIs in their reporting framework. They also plan to adopt the Unique Product Identifier (UPI) for transaction reporting, ensuring their compliance system matches up with global best practices.
“Given the inclusion of Digital Token Identifiers in ESMA’s latest guidelines, we’ll be adapting this tool in our jurisdiction,” announced the HKMA and SFC, signaling a clear intention to keep pace with evolving international standards.
However, they will continue to observe how other major markets regulate before fully committing to additional mandates.
What’s Next? A 2025 Deadline
The Hong Kong authorities aim to roll out these new reporting standards by Sept. 29, 2025, giving crypto service providers time to adjust.
Meanwhile, Hong Kong is also pushing forward with its central bank digital currency (CBDC) project, the digital Hong Kong dollar (e-HKD). The HKMA recently launched the second phase of its pilot study, focusing on tokenized asset settlements, offline payments, and programmable features.
With these moves, Hong Kong is positioning itself as a global leader in both crypto regulation and digital currency innovation.
