Has the first Chinese stablecoin stock emerged?

The popularity of stablecoins continues to rise globally, and the new licenses recently obtained by Chinese-funded securities firms have added fuel to the fire. Guotai Junan International officially obtained approval from the Hong Kong Securities and Futures Commission (SFC) on June 24 to upgrade its existing securities trading license to provide virtual asset trading services, becoming the first Hong Kong-based Chinese securities firm with full-fledged virtual asset service capabilities. Stimulated by this news, its Hong Kong stock price soared nearly 200% on the 25th, driving the Hong Kong-based Chinese securities firm index up by more than 11% in a single day. Clearly, this breakthrough is a key step for financial institutions to deeply participate in the virtual asset market, and also provides substantial support for Hong Kong's strategic goal of building an "international virtual asset center." After Guotai Junan International's license upgrade, customers will be able to trade mainstream cryptocurrencies such as Bitcoin and Ethereum, as well as stablecoins such as Tether (USDT), through the same platform, while obtaining compliant investment advice and participating in innovative products such as tokenized securities, truly realizing a "one-stop" allocation of traditional securities and digital assets. At a time when there are no listed companies in the Chinese capital market that can be directly compared to Circle, the first U.S. stablecoin stock, some investors have even called Guotai Junan International the "first Chinese stablecoin stock." Looking back to 2024, Guotai Junan International took the lead in launching structured products based on virtual asset spot ETFs in the Hong Kong market, and obtained a license from the Hong Kong SFC to carry out virtual asset trading platform introducing agent business; by 2025, the company was confirmed by the Hong Kong SFC to be able to distribute tokenized securities to customers or provide advice on tokenized securities, and launched a digital bond issuance business. This path coincides with the "A-S-P-I-Re" roadmap for the Hong Kong virtual asset market released by the Hong Kong SFC in February 2025, which connects (Access), safeguards (Safeguards), products (Products), infrastructure (Infrastructure) and relationships (Relationships). Its 12 specific measures include promoting market participation, implementing adaptive compliance and product frameworks, and upgrading infrastructure by combining the reliability of traditional finance with the efficiency of blockchain technology. It is worth noting that although the new license covers various types of virtual assets, stablecoins are still regarded as the hub of the entire trading ecosystem. The core lies in the fact that stablecoins are the "bridge currency" connecting traditional finance and the virtual asset market. Their value is pegged to fiat currency, their volatility is low, and they can be used for cross-border payments or on-chain investment. The Hong Kong "Stablecoin Ordinance" will take effect on August 1 this year, becoming the world's first jurisdiction to implement full-chain regulation of fiat-backed stablecoins. Citibank predicts that the global stablecoin market will reach $1.6 trillion to $3.7 trillion by 2030, and Hong Kong is expected to occupy a significant share by virtue of its first-mover advantage in regulation. Xiao Feng, chairman and CEO of HashKey Group, Hong Kong's largest licensed virtual asset exchange, believes that the development of tokenization and stablecoins will completely change the way global financial markets operate. The market reaction has to some extent confirmed the strategic value of the license. When Hong Kong stocks opened on June 26, Guotai Junan International once again rose 90%, and then fluctuated sharply, closing down 6%. Although stock prices are unpredictable, what is certain is that the virtual asset market, with a daily trading volume of hundreds of billions of dollars, has opened up a new battlefield for securities firms mired in the traditional brokerage business. At the same time, new cross-border financial scenarios are also opening up. In April of this year, Guotai Junan International assisted a central enterprise in successfully issuing $1.500 million in tokenized bonds, becoming one of the first institutional projects to complete bond issuance through the Hong Kong Tokenized Securities Central Settlement Network (TCN), verifying the disruptive improvement of blockchain on cross-border financial efficiency, and may expand this model to a wider range of asset classes such as stocks and funds in the future. In this newly opened feast, securities firms are not the only beneficiaries. Dongwu Securities' research report stated that the wave of compliance in virtual assets will activate and reshape the entire non-bank financial industry chain, and a collaborative ecological network surrounding the issuance, circulation, management and application of digital assets is accelerating. For fintech companies, the demand for blockchain underlying infrastructure, smart contract auditing, and on-chain compliance monitoring services is surging, forming a technical support layer; for payment institutions, their cross-border payment networks will be seamlessly connected to the stablecoin clearing system, greatly improving efficiency and sharing handling fees (replacing the high costs of traditional SWIFT); for asset management companies, new types of programmable assets such as tokenized money market funds, bond funds, and even REITs (real estate investment trusts) will emerge to meet the needs of global investors for "on-chain interest," driving asset management scale growth. However, opportunities always coexist with challenges. The test of technical security is the top priority. Virtual asset transactions have extremely high requirements for system protection. For example, hacker attacks and private key management vulnerabilities may lead to significant losses, which requires institutions to continuously invest in upgrading risk control systems. At the same time, the regulatory environment is also subject to change. Although Hong Kong has taken the lead in legislation, the "Guidance and Establishment of National Innovation Act for Stablecoins" in the United States is imminent, and the EU's MiCA (Markets in Crypto-Assets) framework has been implemented. Global regulatory differences may trigger policy arbitrage. Nevertheless, the institutionalization of the virtual asset market will continue to deepen. Data from the Hong Kong Financial Services and the Treasury Bureau shows that in 2024, the scale of virtual asset-related funds surged 200% year-on-year, and the proportion of institutional funds exceeded 40%. The entry of traditional financial institutions is significantly enhancing market credibility. According to industry insiders who directly participated in the virtual asset license application and system docking matters, several local Hong Kong securities firms (such as Victory Securities and Eddid Securities) have completed the upgrade of License No. 1, and more institutions may enter the market in the future. It is reported that securities firms mainly carry out "distribution" trading services, rather than self-operated exchange operations. Their model is to set up an Omnibus Account in a licensed exchange, and provide customers with channels to buy and sell mainstream compliant currencies such as Bitcoin and Ethereum by accessing the trading system, without involving high-risk altcoins or shitcoins. Among the many securities firms transforming from traditional underwriters to full-cycle digital asset service providers, Guotai Junan International's license upgrade is undoubtedly of landmark significance, and is also a microcosm of the gradual maturity of virtual asset regulation in Hong Kong. In the long run, whether Hong Kong can rely on the dual advantages of "compliance + technology" to become an Asian virtual asset hub still depends on the degree of refinement of risk control. For Chinese-funded securities firms, a huge, rapidly growing new market that can share a considerable share by virtue of its own customer and brand advantages is opening its doors in a compliant manner. Guotai Junan's first license may just be the signal for the start of this feast. [Fortune Chinese Website]