June 29, 2024 (Reporter Wang Chen) — Hong Kong’s Securities and Futures Commission (SFC) has revealed that as of June 24, 40 financial institutions have successfully upgraded their existing Type 1 securities trading licenses to include virtual asset trading services under integrated account arrangements.
This list includes 38 brokerages, 1 bank, and 1 internet company, signaling robust participation from traditional finance in Hong Kong’s emerging role as an "International Virtual Asset Hub."
Key Developments in License Upgrades
- Guotai Junan International became the first Hong Kong-based Chinese brokerage to secure a comprehensive virtual asset trading license on June 24, enabling full-spectrum services including trading and advisory.
- Tianfeng International (subsidiary of Tianfeng Securities) pioneered the upgrade in October 2024, becoming the first state-backed firm to obtain this license. The company plans to align with RWA (Real-World Asset) initiatives, consulting, and product design.
- Other major players like CITIC Securities, Huatai Securities, and CMB Securities are actively pursuing upgrades, reflecting a sector-wide pivot toward virtual asset integration.
Why Virtual Asset Licenses Matter
1. Valuation Paradigm Shift
- Firms transitioning to "Digital Asset Service Hubs" witness exponential growth. Robinhood’s crypto-driven revenue (43% of Q1 2025 income) propelled its stock price up 600%, outperforming Coinbase.
- Dongwu Securities highlights Guotai Junan’s new capabilities in custody, derivatives, and issuance as transformative.
2. High-Margin Revenue Streams
- Crypto/stablecoin trading commissions (higher than traditional equities), cross-border settlement profits, and structured derivatives emerge as key drivers.
- Shenwan Hongyuan notes virtual assets introduce new international revenue channels for brokerages.
3. Business Model Innovation
- Participation in stablecoin issuance and RWA tokenization positions firms at the forefront of financial innovation.
- Tianfeng Securities emphasizes RWA’s potential to revolutionize asset financing and traditional banking logic.
FAQ: Virtual Asset Licensing
Q: Which Chinese brokerages are advancing license upgrades?
A: Beyond Guotai Junan, Tianfeng International, Haifu Securities (East Money), Futu Securities, and Interactive Brokers are progressing.
Q: How does Hong Kong’s regulatory framework differ?
A: The SFC oversees virtual assets under "same business, same risk, same rules," while the HKMA manages stablecoin payments, creating a dual-track system.
Q: What services can upgraded licensees offer?
A:
- Brokerage: Crypto trading via integrated platforms.
- Asset Management: Virtual assets in 9th-license funds (>10% allocation).
- Investment Banking: Crypto-related IPOs and M&A advisory.
👉 Explore how leading brokerages leverage virtual asset licenses
This strategic shift underscores Hong Kong’s ambition to blend traditional finance with digital innovation, offering firms unprecedented growth avenues.