In late June 2025, a quiet regulatory approval sent shockwaves across financial markets. On June 24, Guotai Junan International (01788.HK), a Hong Kong-listed securities firm, announced it had received approval from the Securities and Futures Commission (SFC) to upgrade its Type 1 and Type 4 licenses for virtual asset (VA) services. This allowed the firm to offer clients virtual asset trading through a licensed omnibus account structure.
The market reaction was explosive. The next day, the company’s stock surged over 80% at open, eventually closing up 198.39%—adding HK$23.4 billion (approximately $3 billion USD) to its market value in a single session. While the rally cooled in the following days, the message was clear: investors see virtual assets as the next frontier of finance, and Hong Kong is positioning itself at the center.
But how could one regulatory nod trigger such a massive valuation shift? And what does this mean for the broader landscape of digital finance in Asia?
The Mechanics Behind the Market Frenzy
Guotai Junan International wasn’t the first Hong Kong-based broker to obtain SFC approval for virtual asset trading. Others, like Victory Securities and AID Partners, had already upgraded their Type 1 licenses to include VA distribution. But this move signaled something bigger — the formal integration of traditional finance into the digital asset ecosystem.
Unlike crypto-native platforms such as Coinbase or OKX, these brokers aren’t building standalone exchanges. Instead, they act as regulated gateways, connecting clients to SFC-licensed virtual asset trading platforms via omnibus accounts. These accounts allow multiple clients to trade BTC, ETH, and select stablecoins under a single institutional umbrella — with full compliance, custody safeguards, and risk controls.
Crucially, only compliant, vetted cryptocurrencies are available — no meme coins or unregulated tokens. And while mainland Chinese residents remain excluded due to PBOC restrictions, international investors and Hong Kong residents now have a regulated, secure path into digital assets.
The excitement stems from three key revenue opportunities:
- Transaction Commissions: High volatility and frequent trading in crypto markets generate steady fee income.
- Custody & Wallet Services: Offering insured cold storage increases client retention and opens recurring revenue streams.
- Future Product Expansion: Anticipated launches of crypto-linked structured notes, ETNs (Exchange Traded Notes), and tokenized ETFs could unlock premium financial products targeting high-net-worth individuals and younger investors.
According to the SFC, 41 institutions currently provide virtual asset trading services through approved platforms. While most focus on brokerage rather than exchange operations, their collective presence strengthens Hong Kong’s status as a compliant financial gateway.
Speculation vs. Substance: Is the Hype Justified?
Despite the optimism, much of the market’s enthusiasm remains speculative. Many of the licensed platforms still suffer from limited liquidity, few tradable assets, and shallow order books compared to global giants like Binance or Coinbase.
Why? Because Hong Kong enforces strict listing standards. No ICOs. No unvetted tokens. No leverage trading above regulated limits. As a result, local exchanges struggle to compete on variety — though they win on safety.
But this trade-off may be exactly what institutional investors want.
- Regulatory Oversight: All platforms are monitored by the SFC or HKMA (for stablecoins).
- Asset Protection: Client funds are segregated, insured, and auditable.
- KYC/AML Compliance: Rigorous identity checks prevent illicit use.
- Transparency: Only thoroughly reviewed digital assets are listed.
For novice investors or risk-averse institutions, these features make Hong Kong’s model far more attractive than decentralized or offshore alternatives.
And here’s the key insight: people may not choose Hong Kong platforms because they’re flashier — but because they’re trustworthy.
The Rise of Stablecoins: Fueling the Next Wave
While trading licenses grab headlines, stablecoins are quietly becoming the backbone of Hong Kong’s digital asset strategy.
Starting August 1, 2025, Hong Kong will enforce its new Stablecoin Ordinance, requiring issuers to obtain licenses and maintain full reserves. This positions Hong Kong as one of the first jurisdictions globally to formally regulate algorithmic and fiat-backed stablecoins.
Companies like JD Blockchain, Circle (via potential partners), and even Ant Group have expressed interest in launching compliant stablecoins in the region. Why? Because history shows that distribution is everything.
Take USDC: its success wasn’t just about being “compliant.” It was about having Coinbase as a distribution engine — integrating USDC across chains (Ethereum, Arbitrum, Base), enabling low-cost transfers, powering DeFi protocols, and supporting cross-border settlements.
Now, Hong Kong’s licensed brokers and exchanges could play that same role — becoming primary on-ramps for new regulated stablecoins.
👉 See how regulated stablecoins are transforming global payments — and who stands to benefit most.
Moreover, stablecoins aren’t just for trading. They’re critical for:
- RWA (Real World Asset) Tokenization: Representing real-world assets like bonds, gold, or renewable energy credits on-chain.
- Tokenized ETFs: Enabling frictionless secondary market trading without legacy settlement delays.
- Cross-Border B2B Payments: Reducing costs and time in international trade settlements.
Hong Kong’s Web3 Master Plan: LEAP Forward
The timing of Guotai Junan’s license approval was no accident. Just two days later, on June 26, the Hong Kong government released the Hong Kong Digital Assets Development Policy Declaration 2.0 — a sweeping roadmap that redefines the city’s role in the global Web3 economy.
Unlike the 2022 version, which was largely aspirational, Policy 2.0 is action-oriented, built around a “LEAP” framework:
- Licensing & Regulation
- Ecosystem Development
- Asset Tokenization
- Professional Talent
Three pillars stand out:
- Stablecoin Regulation: Full licensing regime effective August 2025.
- RWA as Strategic Priority: Tokenizing gold, green energy certificates, EV fleets, and logistics assets.
- Tax Incentives for Digital Funds: Proposed exemptions on stamp duty and profits tax for tokenized ETFs and digital asset funds.
These aren’t small tweaks — they’re structural reforms designed to make Hong Kong a global hub for institutional-grade digital finance.
Consider this: today’s tokenized money market funds offer yields around 1.5 basis points per day. But a typical 10-basis-point stamp duty makes short-term trading uneconomical. Remove that tax — and suddenly, high-frequency digital asset strategies become viable.
This is how policy drives innovation.
Bridging the Physical and Digital Worlds
At its core, Hong Kong’s strategy isn’t just about crypto — it’s about digitizing value itself.
The emergence of RWA and regulated stablecoins creates what some call “digital twins” — blockchain representations of real-world assets. Whether it’s warehouse receipts, carbon credits, or government bonds, anything with clear ownership and measurable value can be tokenized.
This convergence bridges two worlds:
- The open, programmable nature of blockchain
- The regulated, auditable framework of traditional finance
Yes, challenges remain: valuation standards, legal enforceability, cross-jurisdictional recognition. But Hong Kong is betting that compliance isn’t a barrier — it’s the entry ticket.
FAQ: Your Questions Answered
Q: Can mainland Chinese investors use Hong Kong’s licensed crypto services?
A: No. Due to PBOC regulations, mainland residents are currently prohibited from participating in virtual asset trading through Hong Kong platforms.
Q: What’s the difference between a broker offering crypto access vs. an exchange like OKX?
A: Brokers act as regulated intermediaries using omnibus accounts; exchanges allow direct peer-to-peer trading. Brokers emphasize compliance and integration with traditional portfolios.
Q: Are stablecoins in Hong Kong going to be backed 1:1?
A: Yes. Under the upcoming Stablecoin Ordinance, all licensed issuers must hold full reserves in low-risk assets like cash or short-term government securities.
Q: Will tokenized ETFs really get tax breaks?
A: The government has proposed stamp duty and profits tax exemptions pending legislative approval — a move aimed at boosting liquidity and investor adoption.
Q: Is Hong Kong trying to compete with Singapore or Dubai?
A: Not directly. Hong Kong’s edge lies in its proximity to China’s capital markets and its common-law system — positioning it as a bridge between East and West in digital finance.
Q: How soon will we see tokenized real estate or gold in Hong Kong?
A: Pilot programs for gold and green bonds are expected within 12–18 months; broader rollout depends on technical infrastructure and regulatory clarity.
👉 Explore how asset tokenization is redefining ownership — and where to watch next.
Final Thoughts: Building the Future on Compliance
Hong Kong isn’t chasing crypto hype. It’s building a sustainable digital financial ecosystem grounded in regulation, transparency, and institutional trust.
The $23.4 billion surge wasn’t just about one license — it was a vote of confidence in Hong Kong’s long-term vision. From stablecoins to tokenized ETFs, from RWA to tax reform, the pieces are falling into place.
The road ahead won’t be easy. Liquidity must grow. Use cases must expand. Global coordination will be essential.
But one thing is certain: the future of finance is being written in code — and Hong Kong wants to author it.
Core Keywords: virtual asset, Hong Kong, stablecoin, tokenization, SFC, RWA, digital assets, Web3