Guotai Junan Securities (Hong Kong), a subsidiary of Guotai Junan International, has been officially approved to provide crypto asset trading services, becoming the first mainland securities company in Hong Kong to do so.
A mainland Chinese securities firm has upgraded its Type 1 license for securities business to include crypto asset trading, allowing clients to access top cryptocurrencies like Bitcoin and Ethereum.
The quick approval paved the way for many other companies to follow.
According to a company statement on Wednesday, the Hong Kong Securities and Futures Commission (SFC) granted the approval on Tuesday, upgrading the company’s Type 1 license to provide cryptocurrency trading services through pooled accounts with SFC-licensed platforms.
Thanks to this upgrade, the securities firm's clients will be able to trade major cryptocurrencies such as Bitcoin, Ethereum and popular stablecoins such as USDT.
Guotai Junan International shares surged nearly 200% on the news, closing at HK$3.7 ($0.47) on Wednesday.
Hua Chuang Securities also revealed that the approval from the SFC was faster than expected. The company predicted that in the future, when mainland securities companies with international branches try to upgrade to a Type 1 license, the process will proceed at a similar pace.
They expect many leading securities firms, especially those with large client bases, to expand their business into crypto assets.
Not only is the timing favorable, but Hong Kong is also an ideal location. The city is known for its favorable regulatory environment, which makes Hua Chuang Securities confident in the potential for the development of the crypto asset ecosystem here.
A report from Futu Securities also agreed, noting that stablecoins have the potential to boost the global development of Chinese securities firms, as current laws do not allow them to operate related to crypto assets on the mainland.
Futu believes that the development of stablecoins will reshape the role of securities companies, promoting asset securitization and becoming cross-border payment centers, instead of just acting as transaction brokers.
This means increasing the valuation value of securities companies in the future.
Terence Chong Tai-leung, executive director of the Lau Chor Tak Institute of Global Economics and Finance at the Chinese University of Hong Kong (CUHK), agrees, saying that the boom in crypto asset trading services in Hong Kong, whether funded by mainland, local or foreign funds, will bring huge benefits to the city’s financial and fintech sectors.
Favorable Legal Framework Is Attracting Crypto Investors to Hong Kong
Businesses in Hong Kong are increasingly interested in investing in cryptocurrencies, thanks to its clear and friendly regulatory framework.
This legal framework is encouraging many investors who have been on the sidelines to enter the market, and many names have responded to this call.
Among the notable new investors is VMS Group, an asset manager with nearly $4 billion in assets under management. The firm plans to allocate up to $10 million to DeFi hedge fund Re7 Capital’s strategies, according to managing partner Elton Cheung.
The decision is part of an effort to diversify its portfolio into more liquid assets, upgrading its focus on private equity and the long-term strategies the firm has maintained for more than two decades.
While traditional investments have delivered strong performance, liquidity has declined as many companies choose to stay private longer, making exits more difficult.
Source: https://tintucbitcoin.com/china-san-grants-permission-to-transfer-digital-money/
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