Hong Kong Pushes New Crypto Rulebook for Insurers

Hong Kong’s insurance regulator has unveiled a groundbreaking proposal that would allow insurers to invest in cryptocurrencies for the first time. The Hong Kong Insurance Authority plans to impose a 100 per cent risk charge on crypto assets held by insurance companies.

The Hong Kong Insurance Authority is proposing a slate of new rules to channel insurance capital into assets including cryptocurrencies and infrastructure https://t.co/9gfuoU0YaU

— Bloomberg (@business) December 22, 2025

The framework, revealed in a December 4 presentation obtained by Bloomberg News, marks an unprecedented move to redirect insurance capital toward government-prioritized sectors. Stablecoin investments would face risk charges based on the fiat currency they are pegged to.

Public consultation on the proposal will run from February to April next year. Legislative submissions will follow the consultation period, according to the regulatory timeline.

The regulator confirmed it has commenced a review of the risk-based capital regime this year. A spokesperson stated the primary objective is supporting both the insurance industry and wider economic development.

Hong Kong Advances Digital Finance Hub Strategy

Hong Kong has been aggressively building a regulatory framework to support crypto asset and stablecoin development. The city aims to establish itself as a leading digital finance hub in the Asia-Pacific region.

The Hong Kong Monetary Authority, functioning as the city’s de facto central bank, expects to grant the first batch of stablecoin approvals early next year. This milestone would cement Hong Kong’s position as a crypto-friendly jurisdiction.

The insurance framework extends beyond cryptocurrencies to include infrastructure investments. Hong Kong is seeking new growth avenues as its economy faces ongoing challenges.

The regulator proposes capital incentives for insurers investing in Hong Kong or mainland China infrastructure projects. Eligible projects include new town developments and urban area construction in the city.

The Northern Metropolis stands out as a key beneficiary of this proposal. This area borders mainland China and is being developed as a technology hub.

Hong Kong’s government, currently facing a budget deficit, has been actively seeking private capital for the Northern Metropolis project. The insurance regulator maintains it operates independently of government direction.

Projects listed or issued in the financial hub would qualify for the proposed capital incentives. One stated objective is supporting government initiatives for local infrastructure development.

Hong Kong Crypto Tax Reporting Takes Shape

Meanwhile, the government launched a separate public consultation on December 9 regarding crypto-asset tax reporting. The initiative targets automatic exchange of tax information on digital asset transactions with international partners starting in 2028.

Legislative amendments will implement the Crypto-Asset Reporting Framework developed by the Organisation for Economic Co-operation and Development. Hong Kong plans to complete these amendments within the coming year.

🇭🇰 Hong Kong

Government opens CARF consultation for automatic crypto tax data exchange by 2028, amended CRS implementation by 2029. Secretary Christopher Hui commits to international tax cooperation and cross-border evasion prevention. Public feedback accepted until Feb. 6,… pic.twitter.com/R0kiJ9Ia13

— CoinMarketCap (@CoinMarketCap) December 11, 2025

Secretary for Financial Services and the Treasury Christopher Hui emphasized the strategic importance of these moves. He stated they demonstrate Hong Kong’s commitment to international tax cooperation and combating cross-border tax evasion.

The OECD launched its second peer review of Hong Kong’s Common Reporting Standard administrative framework in 2024. The review examines effectiveness of the city’s implementation and enforcement mechanisms.

In response to OECD recommendations, Hong Kong proposes mandatory registration for financial institutions. The government also plans to raise penalty levels and strengthen enforcement to maintain favorable international ratings.

Hong Kong has participated in automatic financial account information exchanges since 2018 under the CRS framework. This system enables tax authorities worldwide to detect and combat tax evasion through shared data.

The updated CRS incorporates enhanced reporting and due diligence standards for financial institutions. These entities must now account for emerging digital products in their compliance procedures.

Hong Kong plans to implement amended CRS requirements by 2029. The phased approach allows financial institutions adequate time to prepare for new compliance obligations.