According to Cointelegraph, two top-level Hong Kong financial regulators have announced their intent to adopt reporting requirements set by the European Securities and Markets Authority (ESMA) for crypto over-the-counter (OTC) derivatives. On September 26, the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC) shared a plan to align their OTC reporting requirements with global standards after reviewing responses to a consultation paper from March 2024.
Hong Kong stakeholders and investors have indicated that crypto OTC derivatives investments cannot be classified under the existing traditional five asset classes: interest rates, foreign exchange, credit, commodities, and equities. Some stakeholders recommended using Digital Token Identifiers (DTI) to clearly identify crypto-asset underliers for OTC derivatives. In response, the HKMA and SFC noted that ESMA implemented DTI in reporting in October 2023. DTI currently serves as the core reference point for crypto asset service providers across Europe. The Hong Kong regulators revealed plans to replicate the mandate in their jurisdiction, citing the need for the Unique Product Identifier (UPI) in reporting transactions. They stated, “Given that the Digital Token Identifier has been included in the data field 'Underlier ID (OTHER)' as an allowable value in the upcoming consultation of version 4 of the CDE Technical Guidance, we will accommodate the use of DTI in our reporting requirements.”
The authorities will continue to monitor the outcome of mandates placed by other jurisdictions and adopt a similar regime as deemed necessary. The new reporting requirements in Hong Kong are expected to be implemented by September 29, 2025. Additionally, Hong Kong recently marked a new milestone in developing its in-house central bank digital currency (CBDC), the digital Hong Kong dollar (e-HKD). On September 23, HKMA announced the launch of the second phase of the e-HKD pilot study, Project e-HKD+. Project e-HKD+ will focus on three themes: settlement of tokenized assets, programmability, and offline payments. The new phase will have its own sandbox and last about a year.