In a landmark development for Hong Kong’s financial markets, Guotai Junan International (01788.HK) saw its stock surge over 100% intraday on June 25, reaching a peak of HK$2.50 per share — its highest level since July 2015. Even after some pullback, the stock remained up more than 60% by mid-morning, pushing its market capitalization to HK$19 billion. This explosive rally was fueled by major regulatory news that could reshape the future of digital asset trading in Asia.
The catalyst? The company officially received approval from the Securities and Futures Commission (SFC) of Hong Kong to upgrade its existing securities trading license to include virtual asset trading services and the ability to provide investment advice related to such assets.
👉 Discover how the latest regulatory shift is unlocking new opportunities in digital finance.
This upgrade allows clients to directly trade cryptocurrencies like Bitcoin, Ethereum, and stablecoins such as Tether on Guotai Junan International’s platform — marking a pivotal step toward mainstream adoption of digital assets in traditional finance.
A First Among Chinese-Funded Brokers
With this approval, Guotai Junan International has become the first Chinese-funded securities firm based in Hong Kong to offer comprehensive virtual asset services. Its upgraded capabilities now span:
- Direct virtual asset trading
- Investment advisory services for digital assets
- Issuance and distribution of virtual asset-related products, including over-the-counter derivatives
This positions the broker at the forefront of Hong Kong’s rapidly evolving fintech landscape, where regulators are actively encouraging innovation while maintaining strict compliance standards.
Since January 2024, Guotai Junan International has been strategically expanding into the crypto space, anticipating regulatory changes and growing investor demand. Now, with formal SFC authorization, it can fully integrate digital assets into its existing brokerage ecosystem.
Hong Kong's Clear Vision for Virtual Assets
The move aligns with Hong Kong’s broader strategy to become a global hub for virtual asset innovation. According to a recent report by CITIC Securities, Hong Kong’s commitment to building a robust digital asset ecosystem is evident through its mature financial infrastructure and internationally aligned regulatory framework.
Under current policies, key participants in the virtual asset industry include:
- Virtual asset trading platforms (VATPs)
- Broker-dealers offering crypto services
- Issuers and custodians of stablecoins
- Fund managers and product distributors
To ensure transparency and investor protection, the SFC has established a tiered licensing system. The most critical components include:
1. Virtual Asset Service Provider (VASP) Licensing
Platforms must obtain a VASP license under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance. Brokers engaging in crypto trading typically need:
- Type 1 License: Dealing in securities
- Type 7 License: Providing automated trading services
- Type 9 License: Asset management (required if custody of client funds is involved)
- Type 4 License: Advising on securities (if offering investment recommendations)
Only licensed brokers can facilitate transactions between clients and regulated virtual asset exchanges.
2. Stablecoin Regulation
Stablecoin issuers must apply for a dedicated license, while custodial banks must be authorized financial institutions. They are also subject to capital adequacy and risk management requirements to maintain reserve backing.
3. Virtual Asset Funds
Funds investing in digital assets require SFC authorization. They must comply with disclosure rules, risk mitigation protocols, and operate exclusively for professional investors. Managers often upgrade their Type 9 licenses to cover crypto-based portfolios.
4. Brokerage Services for Digital Securities
Only firms holding a Type 1 license may offer trading in tokenized securities. However, these brokers cannot allow direct fiat deposits or withdrawals — all transactions must flow through licensed virtual asset platforms.
👉 See how leading financial institutions are integrating blockchain into their core offerings.
Three Models Driving Virtual Asset Adoption
As outlined in a research note by CICC (601995), revenue from virtual asset trading primarily comes from transaction fees based on trade volume. There are three dominant business models emerging:
Model 1: Exchange-Led Trading Platforms
These platforms act as central order books, matching buyers and sellers directly. Some also offer brokerage functions, enabling users to trade without managing private keys.
Model 2: Broker-Exchange Partnerships
Traditional financial institutions with strong retail reach — such as securities firms — partner with licensed crypto exchanges to offer integrated trading experiences. This model leverages existing client trust and compliance frameworks.
Model 3: Wallet-Based Proprietary Trading
Digital wallets with large user bases sometimes act as market makers, trading directly against their users. While convenient, this model raises concerns about conflict of interest and counterparty risk.
Guotai Junan International’s approach aligns closely with Model 2, combining its established brokerage infrastructure with secure access to regulated digital asset markets.
Why This Matters for Investors
The integration of virtual assets into traditional brokerage platforms signals a turning point. It reflects growing institutional confidence in blockchain-based financial instruments and suggests that crypto is transitioning from speculative asset to legitimate investment class.
For retail investors, this means:
- Greater accessibility to digital assets through familiar interfaces
- Enhanced security via regulated custodianship
- Clearer tax and compliance guidance
For the broader market, it strengthens Hong Kong’s position as a bridge between Eastern capital and Western blockchain innovation.
👉 Learn how you can navigate the next wave of financial transformation today.
Frequently Asked Questions (FAQ)
Q: What does Guotai Junan International’s new license allow?
A: The upgraded license permits the firm to offer direct trading of cryptocurrencies and stablecoins, provide investment advice on virtual assets, and distribute related financial products — all under SFC supervision.
Q: Can any broker in Hong Kong offer crypto trading now?
A: No. Only brokers with specific SFC approvals — including Type 1 and potentially Type 7 or 9 licenses — can legally provide virtual asset services, and they must partner with licensed exchanges.
Q: Is Hong Kong open to all types of crypto businesses?
A: Hong Kong supports regulated virtual asset activities but maintains strict oversight. Unlicensed operations, privacy coins, and anonymous trading are not permitted.
Q: Are retail investors allowed to trade crypto through brokers?
A: Yes, but only through SFC-approved platforms and under certain conditions. Brokers may restrict access based on risk profiles or investor classification.
Q: How does this affect Bitcoin and Ethereum prices long-term?
A: Increased institutional access via trusted brokers can drive sustained demand, improve liquidity, and reduce volatility over time — positive signals for long-term price stability.
Q: Will other Asian brokers follow suit?
A: Likely. With Hong Kong setting a regulatory precedent, other regional firms in Singapore, Japan, and South Korea may accelerate their own digital asset integration plans.
The surge in Guotai Junan International’s share price is more than just a short-term rally — it reflects deep structural shifts in global finance. As virtual assets gain legitimacy through regulation and institutional adoption, we’re witnessing the dawn of a new era in investing.
With Hong Kong leading the charge in Asia, the convergence of traditional capital markets and blockchain technology is no longer a question of if, but how fast.