In a landmark moment for financial innovation, Hong Kong cemented its role as a global fintech hub on June 24, 2025, when the Securities and Futures Commission (SFC) granted an upgraded digital asset license to Guotai Junan International. This pivotal decision allows clients to trade cryptocurrencies and stablecoins directly on the platform—marking the first time in China’s regulatory history that a formal framework has been established for stablecoin issuers under a licensed digital asset service regime.
This breakthrough didn’t just open a new chapter for Hong Kong; it sent shockwaves across global markets. In the three trading days between June 23 and June 25, the Fintech ETF (159851) surged 15.46%. Over the past year, its net value skyrocketed by 116.17%, claiming the top spot among all index funds in China. But what’s driving this unprecedented rally? The answer lies in one transformative force: stablecoins.
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The Rise of Stablecoins: From Niche Innovation to Financial Powerhouse
Stablecoins—digital currencies pegged to real-world assets like the U.S. dollar or euro—have evolved from crypto-market utilities into strategic financial instruments. Unlike volatile cryptocurrencies such as Bitcoin or Ethereum, stablecoins offer price stability while enabling fast, low-cost transactions across borders.
Their applications span:
- Instant cross-border payments
- On-chain settlements in decentralized finance (DeFi)
- Tokenized real-world assets (RWA) trading
- Global remittance systems
According to DefiLlama data, the total market capitalization of stablecoins exceeded $253.8 billion by July 1, 2025, with over 267 active issuers worldwide. Dominant players like USDT and USDC control 86% of the market, reinforcing the dollar’s digital dominance. Yet, this landscape is shifting.
Hong Kong’s new regulatory framework positions it as a pioneer in Asia, potentially paving the way for offshore RMB-backed stablecoins. Analysts at Everbright Securities suggest these could become a "digital bridge" for RMB internationalization—embedding the yuan into global blockchain payment rails and offering an alternative path amid evolving geopolitical and monetary dynamics.
“This may be the most significant shift in global monetary architecture since the collapse of Bretton Woods.”
— Financial Policy Research Institute
As tech giants like JD.com and Ant International move toward securing stablecoin licenses, the race is no longer just technological—it's geopolitical.
Why Fintech ETF (159851) Is Leading the Charge
The Fintech ETF (159851) isn’t merely riding the wave—it’s built on it. With 23% exposure to companies tied to stablecoin infrastructure, it holds the highest concentration among all ETFs in China. Its underlying index, the CSI Fintech Theme Index, includes leaders such as:
- East Money (300059) – Dominant online brokerage and financial information platform
- Tonghuashun (300033) – AI-driven investment tools and data analytics
- Hundsun Technologies (600570) – Core IT provider for banks and exchanges
- Sichuan Changhong (600839) – Blockchain integration and digital currency research
- Runhe Software (300339) – Huawei HarmonyOS partner with fintech solutions
These firms are not just beneficiaries of market sentiment—they’re active builders of the next-generation financial stack.
During last year’s “9·24 rebound,” the ETF gained 123% in just 32 trading days, showcasing its high beta to market liquidity and investor confidence. This sensitivity stems from two powerful forces converging:
- Internet brokers thrive in bull markets, where trading volume surges and commission revenues grow exponentially.
- Financial IT providers scale with institutional demand, as banks and brokerages invest heavily in AI, cloud infrastructure, and compliance systems during expansion cycles.
Together, they form a compounding engine perfectly aligned with rising digital asset adoption.
Market Momentum: A Perfect Storm of Drivers
Three macro forces are fueling capital inflows into fintech equities:
| Driver | Impact |
|---|---|
| Interest rates below 1% | Traditional savings yield near-zero returns |
| Household deposits exceeding ¥160 trillion | Massive capital seeking alternative returns |
| A-share turnover >¥1 trillion for 23 consecutive days | Institutional and retail participation accelerating |
As noted by CITIC Securities in their report “Witnessing History,” we’re in the early stages of a structural shift: from interest-dependent saving to risk-aware investing. With only 10% of Chinese household income coming from dividends—compared to a 55% average across other developed economies—the potential for capital reallocation is enormous.
Dongwu Securities’ chief economist Lu Zhe emphasizes: “When depositors start chasing yield, markets don’t just rise—they transform.”
And transform they have. By June 30, 2025, the Fintech ETF reached ¥5.73 billion in assets under management, with ¥714 million net inflows over ten days and an average daily turnover of ¥751 million—solidifying its status as the most liquid and dominant player in its category.
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Beyond Hype: The Real-World Impact of Digital Asset Evolution
While headlines focus on price swings, the deeper story is about infrastructure transformation. Stablecoins are not speculative toys—they’re becoming foundational layers for modern finance.
For example:
- A manufacturer in Guangdong can now receive USD payments from Brazil in seconds via USDC, avoiding weeks-long SWIFT delays and high fees.
- A Hong Kong-based fund uses tokenized government bonds settled in stablecoins to streamline custody and reduce counterparty risk.
- Remittance corridors across Southeast Asia are being rebuilt using blockchain rails powered by regulated stable assets.
These use cases highlight a critical shift: from digitizing money to reengineering financial processes.
And China’s tech ecosystem is well-positioned to lead. Companies like Sichuan Changhong and Runhe Software are integrating blockchain into Huawei’s HarmonyOS ecosystem, creating interoperable platforms that could power everything from smart contracts to decentralized identity verification.
Frequently Asked Questions (FAQ)
Q: What makes stablecoins different from regular cryptocurrencies?
A: Stablecoins maintain price stability by being backed by reserves such as fiat currency or short-term securities. This makes them ideal for payments and savings, unlike volatile assets like Bitcoin.
Q: Is investing in fintech ETFs safe?
A: While ETFs offer diversification, they are subject to market risk. The Fintech ETF (159851) is highly sensitive to policy changes, interest rates, and tech adoption trends. Investors should assess their risk tolerance before entering.
Q: Can RMB-backed stablecoins challenge the dollar’s dominance?
A: Not immediately—but they can expand usage of the yuan in digital trade and cross-border commerce. Strategic deployment through Hong Kong could create a parallel digital payment corridor.
Q: How does this affect ordinary investors?
A: As traditional deposit yields vanish, assets like fintech ETFs offer exposure to long-term structural growth in financial digitization—though with higher volatility.
Q: Are stablecoins regulated in China?
A: Mainland China bans private cryptocurrency trading, but Hong Kong operates under “One Country, Two Systems” and has established a clear licensing regime for virtual asset service providers since 2023.
Q: What role do AI and blockchain play in fintech growth?
A: AI enhances credit scoring, fraud detection, and personalized wealth management. Blockchain enables transparent settlement, tokenized assets, and programmable money—all core components of next-gen finance.
Conclusion: Standing at the Edge of a New Financial Era
The 116% surge in the Fintech ETF (159851) is more than a market anomaly—it’s a signal flare marking a fundamental transition. Just as Rockefeller capitalized on energy infrastructure and Bezos harnessed the cloud, today’s opportunity lies in aligning with the digitization of money itself.
With Hong Kong leading regulatory innovation, mainland tech firms building scalable infrastructure, and household capital beginning its migration from banks to markets, the conditions for sustained growth are in place.
The question isn’t whether digital finance will reshape our world—it already is. The real question is: Will you be part of it?
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Note: All data presented reflects market conditions as of June–July 2025. Past performance does not guarantee future results. This article contains no investment advice. Please consult professional financial advisors and review fund documents before making any investment decisions.