Introduction
Securities firms are actively expanding into virtual asset trading services. Recently, Guotai Junan International Holdings Limited became the first Hong Kong-based Chinese securities firm to offer comprehensive virtual asset trading services, with approval progress exceeding expectations. Analysts believe this marks a pivotal step for Chinese securities firms in entering the virtual asset market under regulatory compliance, potentially unlocking further growth in international operations.
Guotai Junan International’s License Upgrade
In February 2025, the Hong Kong Securities and Futures Commission (SFC) released the "A-S-P-I-Re" regulatory roadmap for virtual assets, outlining a clear development path for Hong Kong’s virtual asset ecosystem.
The flexible upgrade of licensing systems has enabled Chinese securities firms to integrate traditional services with virtual assets. On June 24, Guotai Junan International, a subsidiary of Guotai Haitong Group, received approval from the SFC to upgrade its existing securities trading license to include virtual asset trading services and advisory functions. This upgrade allows clients to trade cryptocurrencies, stablecoins, and other virtual assets directly on Guotai Junan International’s platform.
With this milestone, Guotai Junan International becomes the first Hong Kong-based Chinese securities firm to offer end-to-end virtual asset services, including:
- Virtual asset trading
- Advisory services for virtual asset transactions
- Issuance and distribution of virtual asset-related products (e.g., OTC derivatives)
Xu Kang, Chief Financial Analyst at Huachuang Securities, noted:
"This move, colloquially termed 'Type 1 License Upgrade' in Hong Kong, reflects Guotai Junan International’s early involvement in the sector. More Chinese securities firms with international subsidiaries are expected to follow, enriching the market ecosystem—especially established players with strong client bases."
Leading the Market: Guotai Junan’s Benchmark Impact
Tian Liang, Chief Financial Analyst at CITIC Securities, emphasized:
"Hong Kong’s strategic commitment to virtual assets is unwavering. Leveraging robust financial infrastructure and an international regulatory framework, the city is rapidly solidifying its position as a global hub for virtual assets. Traditional financial institutions are responding by strengthening their licensing and operational capabilities."
The SFC’s official data lists 11 licensed virtual asset trading platforms, spanning traditional financial institutions and tech-driven entities. Guotai Junan International’s upgrade sets a precedent for peers, offering a replicable model to expand international business.
Sun Ting, Non-Bank Financial Analyst at Soochow Securities, added:
"Guotai Junan International demonstrates that top Chinese securities firms can operate virtual asset services compliantly, paving the way for others like CITIC Securities and CICC. The industry focus is shifting from low-value homogenized services to building core competencies in cross-border digital finance infrastructure—centered on clearing hubs and securitization engines. This not only diversifies revenue (boosting high-margin services) but also unlocks new balance sheet expansion opportunities via stablecoin reserves."
Challenges and Considerations
The high volatility and technological novelty of virtual assets pose challenges for traditional risk management systems. Zheng Lei, Chief Economist at Samoyed Cloud Technology Group, told Securities Daily:
"Virtual assets differ systemically from traditional financial assets. While Hong Kong’s 'same risk, same rules' approach allows existing risk frameworks to adapt (e.g., virtual asset management), areas like stablecoins and RWA (Real World Assets) require significant IT upgrades. Current market depth may not justify immediate ROI, leaving some licensed firms’ expansion plans in flux."
🔍 FAQs
Q1: What is the significance of Guotai Junan International’s license upgrade?
A1: It enables the firm to offer virtual asset trading and advisory services, positioning it as a pioneer among Chinese securities firms in Hong Kong.
Q2: How does Hong Kong’s regulatory framework support virtual asset growth?
A2: The "A-S-P-I-Re" roadmap provides clarity, balancing innovation with investor protection, reinforcing Hong Kong’s role as a global hub.
Q3: Will other Chinese securities firms follow Guotai Junan’s lead?
A3: Analysts anticipate more firms, especially those with international subsidiaries, will upgrade licenses to tap into virtual asset opportunities.
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Key Takeaways
- Regulatory Milestone: Guotai Junan International’s license upgrade sets a benchmark for Chinese securities firms.
- Market Expansion: Hong Kong’s pro-innovation policies attract traditional players to virtual assets.
- Risk-Reward Balance: Firms must weigh IT investments against evolving market demands.