The Hong Kong stock market witnessed a dramatic surge in the shares of Guotai Junan International (01788.HK) recently. After an astounding 200% single-day increase, the stock opened nearly 90% higher the following day before experiencing a sharp pullback, ultimately erasing all intraday gains by the close. This volatility was driven by a landmark regulatory announcement.
On June 24th, Guotai Junan International announced it had received approval from Hong Kong's Securities and Futures Commission (SFC) to upgrade its existing securities trading license. This upgrade formally authorizes the firm to provide virtual asset trading services and to offer investment advice related to these assets.
This milestone makes Guotai Junan International the first Chinese-backed brokerage in Hong Kong licensed to offer a full suite of virtual asset-related trading services. Its expanded remit now includes providing virtual asset trading services, offering advice in the process of these services, and issuing and distributing virtual asset-related products, including over-the-counter derivatives.
Most significantly, this means clients will be able to directly trade cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH), as well as stablecoins like Tether (USDT), on Guotai Junan International's proprietary platform.
A Leader in Digital Finance
The company's successful application is the result of its pioneering strategic focus on digital finance and virtual asset businesses. In 2024, it was among the first in the Hong Kong market to launch structured products based on virtual asset spot ETFs. It was also approved to operate as an introducing agent for virtual asset trading platforms.
Building on this foundation, the first half of 2025 saw the firm gain approval to distribute tokenized securities to its clients and subsequently launch its digital bond issuance business. This methodical expansion demonstrates a clear commitment to becoming a comprehensive digital asset service provider.
The Broader Market Impact and Regulatory Landscape
Analysts believe this new license will open a significant, regulated channel for investors to participate directly in cryptocurrency trading. This development is expected to spur growth across related fintech businesses. The announcement had an immediate effect, triggering a rally in digital currency-related stocks, with several companies hitting upper price limits or seeing substantial gains.
According to disclosures from Hong Kong's SFC, there are currently 40 institutions approved to provide virtual asset trading services through omnibus accounts. Besides the newly approved Guotai Junan International, this list includes other prominent names like Tianfeng International (a subsidiary of Tianfeng Securities), Interactive Brokers, China Mid-Term Securities, and ZA Bank.
Furthermore, multiple other Chinese brokerages, including Huatai International and China Merchants Securities International, are reportedly actively applying to upgrade their licenses for virtual asset-related trading. Major industry players like CITIC Securities and Haitong International are closely monitoring the business landscape, with expectations that more Chinese institutions will complete their license upgrades within the next one to two years.
Partnerships and the Evolving Ecosystem
Currently, 11 virtual asset trading platforms (VATPs) have received approval from the SFC. Market analysis suggests that Guotai Junan International's most likely partner for this venture is the HashKey Exchange. Zhu Zhenyu, Sales Director of HashKey Exchange, has stated that the platform has already established cooperative relationships with several leading Chinese brokerages and plans to collaborate with more financial institutions to expand services in the virtual asset domain.
This move is part of a larger, coordinated effort by Hong Kong to establish itself as a global core hub for virtual assets. Stablecoins have become a particular focus of this strategy.
The Rise of Stablecoins and Hong Kong's Regulatory Framework
Stablecoins are currently a major focal point in international finance. Recent events, such as the successful NYSE listing and subsequent stock price surge of US-based Circle, the company behind USDC, underscore this trend. Regulatory developments are also accelerating, with the US Senate passing a key stablecoin bill. Beyond pure financial firms, multinational giants like Walmart and Amazon are also exploring the possibility of issuing their own stablecoins.
In response to this global shift, the Hong Kong Special Administrative Region government announced on June 6th that its Stablecoin Ordinance will take effect on August 1, 2025. This legislation will require any entity issuing fiat-referenced stablecoins (particularly those pegged to the Hong Kong dollar's value) within Hong Kong to obtain a license.
Analysts posit that Hong Kong's role as a clearing center for the Hong Kong dollar and offshore Renminbi makes its pioneering establishment of a stablecoin准入机制 (access mechanism) highly significant. This framework is poised to play a crucial role in servicing the payment infrastructure needs of multilateral economic corridors, such as the Belt and Road Initiative.
The Strategic Shift for Traditional Finance
Research from CITIC Securities indicates that traditional financial institutions are actively entering the virtual asset space. Brokerages are forming alliances with virtual asset exchanges or leveraging their own technological platforms to offer cryptocurrency trading services to investors.
Guohai Securities offers a more transformative outlook, suggesting that stablecoins could catalyze a fundamental shift in the role of brokerages. They are expected to evolve from mere trading conduits into engines for asset securitization and hubs for cross-border clearing. This expanded function is viewed as a major positive factor that could lead to a re-rating and higher valuations for the brokerage sector as a whole.
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Frequently Asked Questions
What does Guotai Junan International's new license allow?
The upgraded license permits them to provide virtual asset trading services, offer related investment advice, and issue/distribute virtual asset-linked products. Clients can trade cryptocurrencies and stablecoins directly on their platform.
Why is Hong Kong focusing on stablecoins?
As a global financial hub and clearing center, Hong Kong sees stablecoins as vital for modernizing payment infrastructure, especially for cross-border trade and multilateral economic initiatives. New legislation effective August 2025 will create a licensed framework for issuers.
How are other brokerages responding to this trend?
Many major Chinese and international brokerages in Hong Kong are either applying for similar license upgrades or actively exploring partnerships with licensed virtual asset trading platforms to enter this growing market.
What is the significance for traditional investors?
This provides a regulated, familiar channel through a established brokerage for investors to gain exposure to digital assets, potentially reducing the perceived risk and complexity compared to using standalone crypto exchanges.
What are the risks involved with trading virtual assets?
Virtual assets are known for their high volatility and are subject to a evolving regulatory environment. While licensed services provide more security, market, technology, and regulatory risks remain, and investors should exercise caution.
Could this model be expanded beyond Hong Kong?
While initially focused on Hong Kong, the successful integration of traditional brokerage services with virtual asset trading could serve as a blueprint for other financial centers considering similar regulatory frameworks.
Market investments carry inherent risks. This content is for informational purposes only and should not be considered as personal investment advice or a recommendation. Individuals should assess their own financial situation and investment objectives before making any decisions.