On June 24, Guotai Junan International Holdings Limited (Hong Kong Stock Exchange: 01788.HK, hereinafter referred to as 'Guotai Junan International') officially announced that its wholly-owned subsidiary, Guotai Junan Securities (Hong Kong) Limited, received approval from the Hong Kong Securities and Futures Commission (SFC) to upgrade its Type 1 securities trading license to a new license that allows providing virtual asset trading services and related advice.

This upgrade makes Guotai Junan International the first Chinese broker in Hong Kong to obtain the full set of virtual asset trading licenses, covering trading services for cryptocurrencies (such as Bitcoin, Ethereum), stablecoins (such as USDT), etc., while also providing clients with relevant investment advice and participating in the issuance and distribution of various virtual asset products, including over-the-counter derivatives.

Hong Kong stock prices soar, driving market frenzy

• During the session, the stock price rose more than 100%, eventually closing up about 198%, at 3.66 HKD;

• Another news source shows that by the close, the increase was still as high as 72.6%, with a turnover exceeding 167 million HKD;

• This surge in stock prices triggered a chain reaction across the entire Chinese brokerage sector and financial technology concept stocks, with A-share broker ETF and related individual stocks leading the rise, and the Shanghai Composite Index also hitting a yearly high.

SFC releases the “A-S-P-I-Re” regulatory roadmap

This license approval coincides with the SFC's release of the virtual asset regulatory roadmap on February 19, which covers five pillars: Access, Safeguards, Products, Infrastructure, and Relationships. The roadmap aims to:

• Simplify market access for virtual asset institutions;

• Strengthen investor protection and custody mechanisms;

• Promote diversified product innovation, such as virtual asset ETFs, tokenized securities, derivatives, etc.;

• Build a robust infrastructure and cross-platform settlement system;

• Strengthen international regulatory cooperation, consolidating Hong Kong's position as a virtual asset hub.

After approval, Guotai Junan International stated that it has plans: to launch virtual asset products based on a spot ETF structure in 2024 and expand its platform introduction agent business; at the beginning of 2025, it will be approved to distribute tokenized securities and start issuing digital bonds.

Significance and future outlook

1. Breaking the ice for Chinese brokers: Guotai Junan International becomes the first Chinese broker to break through the virtual digital asset barrier, marking a significant integration of traditional financial institutions with digital assets.

2. Market sentiment explosion: Nearly 200% single-day increase reflects the market's high expectations for its business prospects and indicates a positive and open market expectation towards Hong Kong's virtual asset regulatory stance.

3. Multi-party collaboration in blockchain: The SFC, traditional brokers, and digital asset institutions work together to promote this direction, which will stimulate the construction of virtual asset infrastructure and innovation in investment services in Hong Kong.

4. Industry diffusion effect: Other Chinese brokers, virtual banks, and custodians such as ZA Bank may accelerate follow-up actions, forming a new wave of industry layout!

Brothers, is our glorious era coming!!!

In summary, the approval of Guotai Junan International for the SFC virtual asset trading license is not only a validation of the brokerage's own capabilities but also an important sign of the maturity of Hong Kong's financial regulatory policies and market ecology. In the short term, inflows into related sectors will bring high volatility; in the medium to long term, it represents a milestone step for Chinese financial institutions on the path of 'compliance and innovation'.