New Landscape of Virtual Asset Trading Services in Hong Kong: Guotai Junan International Obtains License, Attracts Market Attention

Recently, Guotai Junan International announced that it has obtained a virtual asset license in Hong Kong, which has attracted widespread attention from the market. Currently, there are only 4 listed companies holding such licenses, including OSL, Guotai Junan International, Futu Holdings, and Xiangshang Rongke. Among them, the main companies listed in Hong Kong are OSL and Guotai Junan International, while the US stock market has Futu Holdings and Xiangshang Rongke.

Guotai Junan International has been approved to upgrade its "Type 1 Securities Trading License" to a license that allows for virtual asset trading services. The scope of services includes direct virtual asset trading, providing related advice, as well as issuing and distributing products related to virtual assets. In fact, since 2024, the company has introduced structured products based on virtual asset spot ETFs in the Hong Kong market and has been authorized to conduct business as an introduction agent for virtual asset trading platforms.

The approval of this license coincides with the Hong Kong Securities and Futures Commission's release of the "A-S-P-I-Re" regulatory roadmap, which plans to implement stablecoin management regulations in August. The actions of Guotai Junan International are seen as a practical implementation of Hong Kong's strategy to become an "international hub for virtual assets."

After the news was announced, the stock price of Guotai Junan International surged significantly, driving the Hong Kong Chinese securities broker index up. In the A-share market, many brokerage stocks hit the daily limit, and the Wind brokerage index also showed a notable increase.

Although Guotai Junan International has become the first Chinese-funded brokerage approved, it is not the only institution to layout virtual asset licenses. According to industry insiders, several local Hong Kong brokerages have completed the upgrade application for License No. 1.

The market's reaction to Guotai Junan International has been particularly strong, partly due to its state-owned background. As a holding subsidiary of Guotai Junan Securities, its largest shareholder, Guotai Haitong, is ultimately controlled by the Shanghai State-owned Assets Supervision and Administration Commission. Recently, the Shanghai State-owned Assets Supervision and Administration Commission announced that it would invest a large amount of funds to support financial innovation and technological development, which has led the market to have greater expectations for Guotai Junan International's virtual asset layout.

However, currently most brokers do not have their own exchanges and mainly access trading services by setting up integrated accounts on licensed platforms. Many brokers adopt similar models and strictly limit the client range, not accepting mainland residents for trading. This means that, although regulatory breakthroughs seem to be thriving, the actual open virtual asset services are only available to a small number of overseas investors.

For Guotai Junan International, there is still a lack of a clear path on how to transform this new business into sustainable revenue. The intense reaction from the capital market is more of a bet on future scenarios rather than an acknowledgment of actual profitability.

It is worth noting that Guotai Junan International's crypto business essentially relies on the underlying service framework provided by certain exchanges. This "broker + exchange" cooperation model, while achieving complementary advantages, also carries potential risks. Once a compliant exchange expands its proprietary business or encounters technical failures or compliance disputes, its highly integrated cooperative structure with the broker may lead to uncontrollable risk exposure.

In addition, Hong Kong's current regulatory system, while ensuring compliance, has also somewhat suppressed the vitality of market competition. The number of compliant trading platforms that can be connected is limited, resulting in overall insufficient liquidity and a gap in trading prices compared to mainstream markets in Europe and the United States.

Nevertheless, Guotai Junan International's approval for a virtual asset trading service license in Hong Kong is an important step in the integration of traditional brokerage business with blockchain technology. This event indicates that Hong Kong is striving to build a digital asset financial ecosystem that is both compliant and dynamic. The market is also beginning to layout around "compliant virtual assets + financial infrastructure," such as stablecoins, tokenized bonds, and blockchain-enabled brokerages.

Hong Kong is currently trying to promote financial innovation through regulatory advantages, reshaping its status as a financial center. The recent implementation of the "Stablecoin Regulations" and the upcoming licensing new rules are reserving regulatory space for offshore stablecoins. The release by Guotai Junan International allows licensed financial institutions and exchanges to become breeding grounds for incubating stablecoin distribution channels, and Hong Kong's large offshore RMB stock can also provide a liquidity foundation for stablecoins.

However, for ordinary investors in the mainland, participating in the cryptocurrency services offered in Hong Kong still faces many restrictions. Both Guotai Junan International and other brokerages clearly prohibit investors with mainland Chinese identities from opening accounts to participate in digital asset trading. In the future, qualified investors in the mainland may be able to participate in virtual asset investments through regulatory-approved methods, but this will still require time and further evolution of policies.