First Licensed Virtual Asset Trading by Chinese Securities Firm in Hong Kong
On June 25th, Guotai Junan International (01788.HK), a Hong Kong-listed securities firm, announced that its wholly-owned subsidiary Guotai Junan Securities (Hong Kong) Limited received approval from Hong Kong's Securities and Futures Commission (SFC) to upgrade its Type 1 license (securities trading) to include virtual asset trading services. This makes them the first Chinese-funded securities company authorized to provide comprehensive virtual asset services, including:
- Direct cryptocurrency and stablecoin trading
- Virtual asset investment advisory
- OTC derivative products related to digital assets
This regulatory breakthrough triggered a 198.39% single-day surge in Guotai Junan's stock price, with trading volume reaching HK$16.39 billion.
The Global Stablecoin Race Accelerates
The development coincides with prominent business leaders entering the stablecoin arena. JD.com Chairman Richard Liu recently announced plans to pursue stablecoin licenses across major economies, aiming to:
👉 Revolutionize cross-border payments with 90% cost reduction
- Reduce corporate settlement times from 2-4 days to under 10 seconds
- Eventually expand to consumer payment applications
- Establish "JD Stablecoin" for global commerce
Regulatory Frameworks Taking Shape Worldwide
Two major jurisdictions have established stablecoin regulations with striking similarities:
| Regulation Aspect | Hong Kong (Effective Aug 1) | U.S. (Senate Approved) |
|---|---|---|
| Fiat Currency Peg | Required | Required |
| Reserve Requirements | Full asset backing | Full asset backing |
| Licensing System | Mandatory | Mandatory |
These frameworks essentially transform stablecoins into "shadow currencies" of their pegged fiat money—a digital-era version of traditional currency boards like Hong Kong's dollar-peg system.
The Strategic Case for RMB Stablecoins in Hong Kong
1. Unique Policy Advantage
Hong Kong's upcoming Stablecoin Ordinance provides legal clarity for RMB-pegged stablecoin issuance, combining:
- Established legal framework
- Strong market demand
- Proactive policy support
2. Natural Market Fit
As the world's largest offshore RMB hub (over ¥1 trillion deposits), Hong Kong offers:
- Built-in trade settlement needs
- Potential to create SWIFT-alternative channels
- Synergy with existing CIPS infrastructure
3. Competitive Necessity
With USD stablecoins commanding 98% market share, RMB alternatives must:
- Focus initially on Greater Bay Area commerce
- Expand strategically along Belt and Road trade corridors
4. Long-Term Strategic Value
Unlike limited HKD stablecoin prospects, RMB stablecoins could:
- Support Chinese multinationals abroad
- Complement RMB internationalization
- Enhance Hong Kong's financial hub status
5. Compatibility with CBDC Initiatives
RMB stablecoins can coexist with projects like the Multi-CBDC Bridge, which seeks to:
- Enable cross-border central bank digital currency transactions
- Reduce settlement times and costs
- Maintain regulatory compliance
International Currency Trends Favor Action
Two transformative shifts are underway:
- Monetary Multipolarity: The dollar's dominance faces challenges as economic power redistributes globally
- Payment System Innovation: Digital technologies are forcing modernization of outdated cross-border settlement systems
Meanwhile, RMB usage continues growing:
2 trade finance currency
3 global payment currency
3 SDR basket weight
FAQ: RMB Stablecoins in Hong Kong
Q: How soon could RMB stablecoins launch in Hong Kong?
A: With the ordinance effective August 1, technically feasible within 2024—contingent on issuer preparations.
Q: Would RMB stablecoins compete with Hong Kong's dollar peg?
A: No. HKD remains dollar-pegged, while RMB stablecoins create new offshore usage channels.
Q: What prevents USD stablecoin dominance in Hong Kong?
A: Strategic policy support for RMB instruments and natural trade demand with mainland China.
Q: How do stablecoins differ from CBDCs?
A: CBDCs are central bank-issued digital currency, while stablecoins are privately issued but regulated fiat proxies.
Conclusion: Fundamentals Ultimately Decide Currency Success
While stablecoin competition represents tactical maneuvering, long-term currency influence depends on national comprehensive power. The RMB's growing global role creates a timely window to establish its digital shadow currency—with Hong Kong serving as the ideal testing ground.