By WuBlockchain | 2025/06/29 16:04

Among listed companies, only four currently hold Hong Kong virtual asset licenses: OSL, Guotai Junan International (01788.HK), Futu Holdings (FUTU.US), and UP Fintech (TIGR.US, also known as Tiger Brokers).

Author: Aki Chen, WuBlockchain

This article compiles publicly available information and does not represent the views of WuBlockchain. It does not provide investment advice. Readers must comply with local laws and regulations and refrain from participating in illegal financial activities.

On June 24, Guotai Junan International (01788.HK) announced it had obtained a Hong Kong virtual asset license, triggering an 80% surge in its stock price and drawing market attention to the sector. Currently, only four listed companies hold such licenses: OSL, Guotai Junan International, Futu Holdings, and UP Fintech. Among them, OSL and Guotai Junan International are Hong Kong-listed, while Futu and UP Fintech trade in the U.S. Guotai Junan International’s approval has further heightened interest in related concept stocks.

According to the official announcement, Guotai Junan International upgraded its "Type 1 Securities Trading License" to include virtual asset services, covering direct trading (e.g., BTC, ETH, and stablecoins like USDT), advisory services, and the issuance/distribution of virtual asset-related products, including OTC derivatives, structured notes, and tokenized securities.

Since 2024, Guotai Junan International has introduced virtual asset spot ETF-based structured products in Hong Kong and was authorized by the Securities and Futures Commission (SFC) to act as an introducing agent for virtual asset trading platforms. By February 2025, Hong Kong’s SFC unveiled its "A-S-P-I-Re" regulatory roadmap, with stablecoin regulations set for August. Guotai Junan’s moves align with this policy rollout, positioning it as a key player in Hong Kong’s "Virtual Asset International Hub" strategy.

By June 25, Guotai Junan International’s stock skyrocketed 198.4% at opening, lifting the Hong Kong Chinese Broker Index by 11.75%. In the A-share market, brokerages like Tianfeng Securities hit limit-up, East Money rose over 10%, and the Wind Brokerage Index closed up 5.52%.

MetaEraCN noted that while Guotai Junan International is the first Chinese broker approved, it’s not the only one pursuing virtual asset licenses. Industry sources reveal that Hong Kong brokers like Victory Securities and Eddid Securities have also applied for Type 1 license upgrades.

BTCdayu highlighted Guotai Junan International’s state-backed advantage: its parent, Guotai Junan Securities, is 74%-owned by Shanghai SASAC, which recently pledged RMB 10 billion to support financial innovation. This fuels narratives of a "national strategic pilot," granting it policy and resource advantages. In contrast, Futu, as a privately held internet broker, lacks such state-backed appeal.

Additionally, Guotai Junan International is the first Chinese broker approved for full-chain virtual asset services (trading, advisory, distribution), earning a "trailblazer" premium. Its inclusion in the Stock Connect program also allows A-share investors to chase the rally, amplifying volatility. Futu, listed in the U.S., misses this channel despite its earlier virtual asset ventures.

Guotai Junan International’s compliance strategy involves upgrading licenses to enter the virtual asset market. However, most brokers lack their own exchanges, instead relying on licensed platforms like HashKey via omnibus accounts. Firms like Futu, Tiger Brokers, and ZA Bank restrict services to Hong Kong or overseas clients, excluding mainland users due to regulatory hurdles (e.g., tax reporting and cross-border fund compliance).

This limits accessibility for mainland investors, while overseas users prefer platforms like Coinbase and Binance. Thus, converting this business into sustainable revenue remains unclear. The market’s frenzy reflects speculative bets rather than tangible profitability.

The hype also spilled over to service providers: HashKey’s platform token HSK surged 50% in 24 hours, while OSL (00863.HK) rose 18% to a one-year high.

Guotai Junan International’s crypto business relies on HashKey’s infrastructure for trading, custody, and清算. The broker primarily acts as a front-end channel, creating a "broker + exchange" partnership. While seemingly synergistic, this model carries risks:

1. Dependency on HashKey: If the exchange expands its proprietary business or faces technical/regulatory issues, brokers bear连带风险.

2. Limited Competition: Hong Kong’s SFC mandates that brokers use licensed platforms (currently only HashKey and OSL), stifling competition and liquidity. Many institutions thus prefer U.S. platforms for better pricing.

3. Broker Dissatisfaction: Some are pursuing their own VATP licenses to improve pricing and autonomy.

Guotai Junan International’s approval marks a significant step in traditional finance’s integration with blockchain. Hong Kong’s regulatory push—including May’s Stablecoin Ordinance and August’s licensing reforms—aims to reclaim its financial hub status. The city’s RMB 1 trillion offshore liquidity could bolster stablecoin adoption, creating opportunities for brokers.

However, mainland China’s ban on crypto-related financial services remains strict. Only Hong Kong account holders with compliant funds can access these services. While mainland investors are currently barred, future mechanisms akin to Stock Connect may open pathways.