The financial landscape in Hong Kong is rapidly evolving, with digital assets becoming an integral part of the market. The Securities and Futures Commission (SFC) of Hong Kong introduced a license upgrade system in 2023, allowing qualified brokers to expand their services into the digital asset space. Among the first to receive this upgraded license was a prominent local financial group, which has since developed a comprehensive ecosystem for virtual asset services.
This early mover advantage has enabled the group to offer a wide range of services, including digital asset trading, market making, and real-world asset (RWA) solutions. Their progress highlights the growing importance of licensed and regulated participants in fostering a secure and innovative digital economy.
The First-Mover Advantage in Licensed Brokerage
Upgrading its license with the SFC allowed this financial group to operate in the digital asset market with full regulatory compliance. This approval not only enhanced its credibility but also expanded its capacity to serve diverse client segments—from retail investors to institutions.
A significant milestone was Hong Kong’s introduction of Asia’s first Bitcoin spot ETFs and some of the world’s first Ether spot ETFs in 2024. The group was among the few brokerages authorized to assist with the creation and redemption processes of these ETFs. They also enabled physical subscriptions and redemptions, allowing investors to use Bitcoin or Ether directly—a feature that improved market liquidity and flexibility.
Additionally, the group offered margin financing services for virtual asset spot ETFs. This allows clients to leverage their existing ETF holdings, improving capital efficiency and enabling more strategic portfolio management.
According to the group’s Head of Virtual Assets:
“As one of the first licensed brokerages, we are committed to driving innovation within a compliant framework. Our goal is to set a benchmark for Hong Kong’s digital asset market.”
Collaboration and Technological Capabilities
Over the past two years, the group has established strong partnerships with licensed exchanges such as HashKey Exchange and EXIO Limited. These collaborations have helped make cryptocurrency trading more accessible while providing around-the-clock liquidity support.
A robust technical infrastructure has been instrumental in improving trading efficiency and market depth. Reliable systems ensure that investors can execute trades swiftly, even during periods of high volatility.
Market Making and Stablecoin Applications
In May 2025, Hong Kong’s Legislative Council passed the Stablecoin Bill, establishing clear regulations for issuers and paving the way for broader adoption. The financial group responded quickly by collaborating with industry leaders to explore applications of stablecoins in settlements and cross-border payments.
Stablecoins are increasingly seen as a bridge between traditional finance and the digital asset economy. Their stability and transparency make them suitable for everyday transactions and international remittances.
The Head of Virtual Assets noted:
“Stablecoins are more than just a component of the digital asset market—they are key to the globalization of the digital economy.”
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Real-World Assets (RWA): Merging Traditional and Digital Finance
The group is also venturing into real-world asset (RWA) tokenization—a process that involves converting physical assets like real estate or bonds into digital tokens on a blockchain. This opens up new investment avenues and enhances liquidity for traditionally illiquid assets.
Hong Kong’s “A-S-P-I-Re” roadmap and the recently published “Policy Declaration on Virtual Asset Development 2.0” emphasize the importance of sustainable liquidity in the digital asset market. In response, the group plans to introduce RWA services covering real estate, bonds, and other physical assets.
Combining market-making expertise with RWA tokenization can significantly improve capital efficiency and risk management. It also provides investors with more diversified portfolio options.
The Head of Virtual Assets added:
“The integration of digital asset market making and RWA services will be a major driver of innovation and sustainable growth in Hong Kong's financial market.”
The Road Ahead: Hong Kong’s Global Digital Asset Vision
As a full-service financial group, the company’s strategy aligns closely with Hong Kong’s goal to become a global digital asset hub. Future plans include further integration of fintech resources, deeper collaboration with industry partners, and continued innovation in blending traditional and digital finance.
With a clear regulatory framework and active industry participation, Hong Kong is well-positioned to compete on the international stage. The growth of its digital asset market will likely attract more global investors and enhance the city’s status as a financial center.
Frequently Asked Questions
What does a license upgrade allow a brokerage to do?
A license upgrade from the SFC permits brokerages to offer digital asset services such as trading, custody, and market making. It ensures they operate in compliance with local regulations, providing security and trust for investors.
How do physically-backed ETF subscriptions work?
Investors can use cryptocurrencies like Bitcoin or Ether to subscribe to or redeem shares in spot ETFs. This creates arbitrage opportunities and helps keep the ETF’s market price aligned with its net asset value.
Why are stablecoins important for the digital economy?
Stablecoins combine the stability of fiat currencies with the efficiency of blockchain technology. They enable fast and low-cost cross-border transactions, making them ideal for trade and remittance services.
What are real-world assets (RWA) in digital form?
RWAs are tangible assets like property or bonds that are tokenized on a blockchain. This enables fractional ownership, easier transferability, and access to a broader pool of investors.
How does margin financing work with virtual asset ETFs?
Investors can use their virtual asset ETF holdings as collateral to borrow funds for further investment. This increases their buying power but also involves higher risk.
Is Hong Kong encouraging digital asset innovation?
Yes. Through clear regulations, support for ETFs, and new policies like the Stablecoin Bill, Hong Kong is creating an environment that encourages responsible innovation in the digital asset sector.