The virtual asset trading license continues to drive market reactions, with momentum shifting from Hong Kong stocks to A-shares. Market focus has transitioned from Guotai Junan International in Hong Kong to A-share player Tianfeng Securities. Wind data shows that on June 27, Tianfeng Securities briefly hit the daily limit-up before closing 7.89% higher.
Virtual Asset Trading: A Strategic Upgrade for Brokerages
Guotai Junan International recently announced its approval by Hong Kong's Securities and Futures Commission (SFC) to upgrade its existing securities license to include:
- Virtual asset trading services
- Advisory services related to virtual asset transactions
- Issuance and distribution of virtual asset-linked products (including OTC derivatives)
This makes it the first mainland-backed Hong Kong brokerage to offer comprehensive virtual asset services.
Industry experts highlight three key impacts:
- International business expansion: Crypto trading services could significantly boost overseas revenue streams.
- Competitive pressure: This move may accelerate digital transformation among peer brokerages.
- Infrastructure development: Firms will need to build cross-border digital finance capabilities.
New Revenue Streams Emerge
The upgraded license enables:
👉 Direct trading of cryptocurrencies (BTC, ETH)
👉 Stablecoin transactions (USDT)
👉 Virtual asset-linked derivative products
Performance drivers include:
- Transaction fees from crypto/stablecoin trading
- Revenue sharing from cross-border stablecoin settlements
- Structured product design and issuance income
Analyst projections suggest these could become major profit contributors within 2-3 years.
Hong Kong's Regulatory Framework
The SFC officially launched its "A-S-P-I-Re" virtual asset market roadmap on February 19, 2025, featuring:
- Streamlined licensing processes
- Clear compliance requirements
- Enhanced investor protections
Current license statistics:
| License Type | Upgraded Firms | New Capabilities |
|---|---|---|
| Type 1 | 41 | Virtual asset trading via integrated accounts |
| Type 4 | 37 | Virtual asset advisory services |
| Type 9 | 40 | Portfolio management with >10% virtual assets |
Brokerage Adoption Trends
Early movers include:
- Tianfeng International (Tianfeng Securities subsidiary)
- Futu Securities (launched crypto trading pairs in 2024)
- Ping An Securities Hong Kong
Implementation strategies vary:
- Full-service platforms: Integrating crypto trading with traditional securities
- Niche services: Focusing on stablecoin settlements or tokenized securities
- Advisory models: Providing virtual asset investment consultations
Industry Outlook
Projected developments:
- More mainland-backed Hong Kong brokerages obtaining licenses
- Increased RWA (Real World Asset) tokenization projects
- Growing institutional participation in crypto markets
"This represents a fundamental shift from traditional securities services to comprehensive digital asset solutions," notes Sun Ting, Non-Banking Financial Analyst at Soochow Securities.
FAQ Section
Q: How does this affect traditional brokerage services?
A: The upgrade complements existing services rather than replacing them, creating integrated platforms for both traditional and digital assets.
Q: What risks should investors consider?
A: Price volatility remains high. Investors should only use SFC-licensed platforms and maintain diversified portfolios.
Q: When will more brokerages offer these services?
A: Experts predict widespread adoption within 12-18 months as regulatory frameworks mature.
Q: How does this impact Hong Kong's financial hub status?
A: Positions Hong Kong as Asia's leading virtual asset gateway, potentially attracting $20B+ in new capital inflows annually.
Q: Are stablecoins legally recognized?
A: The 2025 Stablecoin Ordinance provides legal clarity, with HKD-pegged stablecoins gaining traction.
Q: What's next for virtual asset regulations?
A: Expect clearer guidelines on tokenized securities and institutional custody solutions by late 2025.
The virtual asset revolution presents both challenges and opportunities for brokerages. Firms that successfully integrate these services while maintaining robust compliance frameworks stand to gain first-mover advantages in this evolving financial landscape.