Event Overview
Guotai Junan International (01788.HK) made headlines on June 24th by securing Hong Kong's virtual asset trading license, triggering an 80%+ stock price surge. This development highlights the growing market interest in licensed virtual asset services among traditional financial institutions.
Currently, only four listed companies hold Hong Kong virtual asset licenses:
- OSL
- Guotai Junan International (01788.HK)
- Futu Holdings (FUTU.US)
- UP Fintech Holding (TIGR.US) (Tiger Brokers)
The license upgrade enables Guotai Junan International to offer:
- Direct virtual asset trading (BTC, ETH, USDT, etc.)
- Virtual asset investment advisory services
- Issuance/distribution of virtual asset products (including OTC derivatives and tokenized securities)
Strategic Timing
The approval coincides with Hong Kong's 2025 regulatory roadmap:
- February 2025: Hong Kong SFC introduces "A-S-P-I-Re" framework
- August 2025: Stablecoin regulations take effect
This positions Guotai Junan as a pioneer in Hong Kong's virtual asset hub strategy.
Market Implications
Why Such Strong Reaction?
State-Backed Advantage: As a Shanghai SASAC-controlled entity, Guotai Junan benefits from:
- Policy support (Shanghai's planned 100B RMB fintech investment)
- Regulatory first-mover status
Access to Mainland Capital:
- As a港股通 stock, attracts A-share investors seeking Web3 exposure
- Contrasts with US-listed Futu's limited mainland access
Narrative Potential:
- "National strategic pilot" perception creates scarcity premium
- Undervalued position versus fully-priced Web3转型 stocks
Opportunities and Challenges for Chinese Brokers
Current Operating Model:
- Most brokers (including Futu/Tiger) utilize HashKey's omnibus accounts
Strict client restrictions:
- Requires Hong Kong/overseas residency
- Excludes mainland retail investors
Key Limitations:
Revenue Conversion:
- Complex compliance requirements deter casual participation
- Competition with global exchanges (Coinbase/Binance) on liquidity
Platform Dependency:
- Over-reliance on HashKey/OSL's near-duopoly
- Potential conflicts if exchanges expand proprietary services
👉 Discover how top brokers navigate virtual asset regulations
Regulatory Landscape Evolution
Hong Kong's progressive approach includes:
- May 2025: Stablecoin Ordinance enactment
- August 2025: New licensing rules
Creating opportunities for: - Offshore RMB stablecoin development
- Institutional distribution channels
Critical Note: Mainland China maintains strict prohibitions on:
- Crypto asset legal tender status
- Financial institution support for virtual currency services
Future Pathways
Potential developments to watch:
Expanded Investor Access:
- Possible QDI/港股通 inclusion (mirroring stock connect evolution)
Platform Diversification:
- More VATP licensees expected to enhance competition
Product Innovation:
- Tokenized bonds
- Regulatory-compliant derivatives
👉 Explore the future of compliant virtual asset trading
FAQ Section
Q: Can mainland Chinese investors trade virtual assets through Guotai Junan?
A: No. Despite Hong Kong licensing, mainland retail investors remain prohibited due to China's capital controls and crypto bans.
Q: How does Guotai Junan's license differ from crypto exchanges?
A: It operates as a traditional broker offering regulated virtual asset services, not as a standalone crypto exchange.
Q: What's the significance of this approval for Hong Kong?
A: Represents a strategic step in establishing Hong Kong as a compliant virtual asset hub while maintaining financial stability.
Q: Are other Chinese brokers likely to follow?
A: Yes. Several Hong Kong-based brokers are reportedly pursuing similar license upgrades to remain competitive.
Q: What are the main revenue challenges for licensed brokers?
A: Converting regulatory first-mover advantage into sustainable profits requires overcoming liquidity limitations and operational complexities.
Q: Could this lead to mainland China softening its crypto stance?
A: Unlikely in the short term. China continues prioritizing financial stability and sovereign digital currency development.