Virtual Asset Trading Opens New Growth Path for Brokerage Firms

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The race for virtual asset trading licenses is reshaping the financial landscape, sending ripples across both Hong Kong and mainland China’s capital markets. What began as a trend among Hong Kong-listed brokers has now spilled into A-share equities, with investor attention shifting from Guotai Junan International to Tianfeng Securities. According to Wind data, Tianfeng Securities surged nearly 10% intraday on June 27, closing up 7.89%, reflecting growing market excitement around brokerages entering the digital asset space.

This momentum was triggered by Guotai Junan International — a subsidiary of Guotai Haitong Securities — announcing it had received formal approval from the Securities and Futures Commission (SFC) of Hong Kong to upgrade its Type 1 license. The new authorization allows the firm to offer comprehensive virtual asset trading services, including transaction execution, advisory, issuance, and distribution of virtual asset-related products such as OTC derivatives. It marks the first time a mainland-backed securities firm in Hong Kong has achieved full-service capabilities in this emerging domain.

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A Strategic Leap into Digital Finance

For investors, this means they can now trade major cryptocurrencies like Bitcoin and Ethereum, along with stablecoins such as USDT, directly through Guotai Junan International’s platform. The upgraded license also permits the firm to provide investment advice during transactions and manage portfolios with significant exposure to tokenized assets.

This strategic expansion positions Guotai Junan International not just as a traditional broker but as a digital asset gateway, bridging conventional finance with blockchain-based markets. As Sun Ting, Non-Bank Financials Chief Analyst at Dongwu Securities, noted, the move opens high-margin revenue streams — including trading commissions, cross-border stablecoin clearing fees, and structured product design — that could become key drivers of future profitability.

With Hong Kong actively positioning itself as a global virtual asset hub, the timing couldn’t be better. In February 2025, the SFC unveiled its regulatory roadmap "A-S-P-I-Re", streamlining compliance processes and lowering barriers to entry for licensed platforms. Investors are reminded to only use SFC-licensed exchanges when trading digital assets — reinforcing the importance of legitimacy and investor protection.

Core Keywords:

Building a Full-Service Digital Ecosystem

Guotai Junan International hasn’t stopped at trading access. Since 2024, the company has been laying the groundwork for a complete digital financial ecosystem:

These developments reflect a broader shift: from offering isolated digital services to building an integrated cross-border digital financial infrastructure.

Other players are following suit. As of June 27, 2025, the SFC listed 41 institutions that have upgraded their Type 1 licenses to include virtual asset trading under a "comprehensive account" framework — including Tianfeng International Securities & Futures, a subsidiary of Tianfeng Securities.

Futu Securities is another notable participant. Despite not being a traditional brokerage, its rapid adoption of crypto services highlights changing client expectations. Since launching Bitcoin and Ethereum trading pairs against HKD and USD in August 2024, Futu has seen steady growth in user engagement.

Xie Zhijian, Managing Director at Futu, shared: “We’ve observed rising trading activity and discussion volume around digital assets this year.” In May 2025, the platform introduced crypto deposit functionality, allowing eligible Hong Kong investors to top up their accounts directly — a feature still rare among licensed brokers.

This end-to-end capability enables users to deposit crypto, trade seamlessly, and reinvest proceeds across asset classes — all within one interface.

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Regulatory Expansion Across Multiple License Types

Beyond Type 1 upgrades, regulatory progress spans multiple license categories:

This multi-layered licensing expansion signals a maturing regulatory environment and paves the way for deeper institutional involvement in digital finance.

Industry Transformation and Competitive Dynamics

Could virtual assets become a game-changer for brokerages? Analysts believe so.

Sun Ting emphasizes the strategic demonstration effect: Guotai Junan International has proven that mainland-backed firms can operate complex digital asset businesses within strict compliance frameworks. This lowers the perceived risk for peers considering similar moves.

As competition intensifies, the battleground is shifting from low-margin brokerage fees toward high-value infrastructure development, particularly in two areas:

  1. Clearing Hub: Using stablecoins to facilitate fast, low-cost cross-border payments — potentially challenging SWIFT’s dominance.
  2. Securitization Engine: Leading the tokenization of real-world assets (RWA), such as bonds and funds, enabling fractional ownership and 24/7 trading.

These innovations don’t just diversify income; they also expand balance sheets through new reserve asset opportunities and enable synergies between light-capital advisory services and capital-intensive operations.

Future Outlook: Mainland Brokerages Go Global via Hong Kong

Hong Kong remains the preferred launchpad for Chinese brokerages expanding overseas. With 13 firms dual-listed in A+H markets and over 30 operating subsidiaries in Hong Kong, the foundation is strong.

Lu Zuanhui from Shenwan Hongyuan Research believes virtual asset services will enhance international offerings and unlock new profit centers. “Given Hong Kong’s push for stablecoin legislation and its ambition to become a digital finance hub, we expect more mainland brokerages to follow,” he said.

Meanwhile, Tao Shengyu from Donghai Securities sees ongoing license approvals as potential catalysts for the broader brokerage sector. “Regulatory support signals greenlight for innovation,” he noted. “Investors should watch for thematic investment opportunities in this evolving space.”

Frequently Asked Questions (FAQ)

Q: What does upgrading to a Type 1 virtual asset trading license allow brokers to do?
A: It enables licensed firms to offer cryptocurrency trading (e.g., Bitcoin, Ethereum), stablecoin transactions, investment advice during trades, and distribution of virtual asset products like ETFs and OTC derivatives.

Q: Why is Hong Kong becoming a hub for virtual asset trading?
A: Clear regulations like the SFC’s "A-S-P-I-Re" roadmap, proactive policy support, and strategic initiatives such as proposed stablecoin legislation make Hong Kong an attractive base for compliant digital finance innovation.

Q: Can mainland Chinese investors use these services?
A: Currently, these services are primarily available to qualified investors in Hong Kong. Mainland access depends on cross-border regulatory alignment and individual brokerage policies.

Q: How might virtual assets change brokerage business models?
A: By introducing high-margin services like structured crypto products, stablecoin clearing revenue, and tokenized securities issuance — moving beyond traditional commission-based models.

Q: Are there risks involved in brokerages offering crypto trading?
A: Yes, including market volatility, custody challenges, cybersecurity threats, and evolving regulations. However, SFC oversight helps mitigate many of these risks through strict licensing requirements.

Q: Will more Chinese brokerages enter the virtual asset space?
A: Industry experts expect so. With early movers proving feasibility and profitability, others are likely to follow — especially those with established Hong Kong operations.

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