Guotai Junan International stock price big pump: The first Chinese-funded brokerage approved for virtual asset trading in Hong Kong triggers a chain reaction.

Author | Wu Says Blockchain Aki Chen

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On June 24, Guotai Junan International (01788.HK) announced that it had obtained a virtual asset license in Hong Kong, leading to a surge in its stock price of over 80%, sparking market interest in this sector. According to statistics, currently, among listed companies, there are only 4 enterprises holding the Hong Kong Virtual Asset Trading Platform (VATP) license, including OSL, Guotai Junan International (01788.HK), Futu Holdings (FUTU.US), and Tiger Brokers (TIGR.US). Among them, the Hong Kong-listed companies holding the Hong Kong virtual asset license are mainly OSL and Guotai Junan International. In the US stock market, there are Futu Holdings and Tiger Brokers. Guotai Junan International's licensing has further increased market attention on related concept stocks.

According to the official announcement, Guotai Junan International has been approved to upgrade its "Type 1 Securities Trading License" to a license that allows for the provision of virtual asset trading services. The scope of services includes: providing direct virtual asset trading services (such as BTC, ETH, and stablecoin USDT), offering advice during the virtual asset trading service process, and issuing and distributing virtual asset-related products including over-the-counter derivatives, structured notes, and tokenized securities.

Since 2024, Guotai Junan International has introduced structured products based on virtual asset spot ETFs in the Hong Kong market and has obtained permission from the Hong Kong Securities and Futures Commission (SFC) to carry out virtual asset trading platform introduction agency business. By February 2025, the Hong Kong SFC released the "A-S-P-I-Re" regulatory roadmap, clearly stating that stablecoin management regulations will be implemented in August. Guotai Junan's actions coincidentally align with the policy rollout rhythm, and are seen as the practical implementation of the Hong Kong government's strategy to become a "virtual asset international hub."

As of June 25, after the opening of Guotai Junan International, the stock price surged straight up, closing with a significant increase of 198.4%, driving the Hong Kong Chinese-funded brokerage index up by 11.75%. In the A-share market, multiple brokerage stocks including Tianfeng Securities hit the daily limit, while Dongfang Caifu rose by over 10%, and the Wind brokerage index closed up by 5.52%.

Why the market reacts fiercely — the licensing effect has symbolic significance.

However, it is worth noting that MetaEraCN tweeted that although Guotai Junan International is the first Chinese-funded brokerage firm to be approved, it is not the only institution laying out plans for virtual asset licenses. According to industry insiders directly involved in the application for virtual asset licenses and system integration, several local Hong Kong brokerages, including Victory Securities and Adept Securities, have successively completed the upgrade application for License No. 1. After the news of Guotai Junan International receiving the license was announced, the capital market reacted strongly, but Futu Holdings (FUTU.US) has been continuously expanding in the virtual asset field since 2022, and its Hong Kong subsidiary, Futu Securities (Hong Kong), has long been connected to a compliant platform, providing services such as digital asset distribution and custody.

According to an analysis by BTCdayu on this difference, Guotai Junan International is a holding subsidiary of Guotai Junan Securities, with the largest shareholder being Guotai Haitong, which holds 74%, and the actual controller of Guotai Haitong is the Shanghai State-owned Assets Supervision and Administration Commission. It has also been reported that the Shanghai State-owned Assets Supervision and Administration Commission recently stated that it will invest 10 billion yuan in the next five years to support financial innovation and technological development. Against this backdrop, the market attributes a "national-level strategic pilot" narrative to Guotai Junan International's virtual asset layout, believing that it may enjoy first-mover advantages in terms of policies, funding, and resource acquisition. In contrast, Futu, as an internet brokerage, is controlled by non-state-owned capital, and its market analogy space is relatively limited, with a relatively small influence domestically. Moreover, Guotai Junan International is the first Chinese-backed brokerage approved to provide full-chain virtual asset services (trading, consulting, distribution), symbolizing a path pioneer under the regulatory structure, thus creating a scarcity premium in the market. Therefore, although Futu obtained similar qualifications through its subsidiary as early as 2023, its identity as an internet platform is different from traditional brokerages, and the market has high expectations for its Web3 transformation, with valuations reflecting this fully, lacking additional favorable catalysts. In contrast, Guotai Junan International's stock price is consolidating at low levels in 2024, and the market has not fully accounted for its progress in virtual assets. More importantly, Guotai Junan International (1788.HK) is a target of the Shanghai-Hong Kong Stock Connect, allowing A-share funds to invest in this stock through the northbound channel. Against the backdrop of the popularity of A-share brokerages, Web3, and stablecoin concepts, A-share funds tend to borrow through Hong Kong Stock Connect to allocate beneficiary stocks, thereby exacerbating stock price volatility and capital chasing. Relatively, Futu Holdings is a U.S.-listed company (FUTU.US), not on the Hong Kong Stock Connect list, and cannot receive A-share funds, making it difficult to form a narrative hype of "policy windfall" even if its qualifications and business capabilities are not inferior.

Opportunities and Risks Faced by Chinese Brokerage Firms and Exchanges

From the perspective of Guotai Junan International's layout, its compliance path is to enter the virtual asset market through upgrading licenses as a traditional brokerage firm, relying on local regulatory channels. However, according to EarningArtist, most brokerages currently do not have their own exchanges, but mainly connect trading services through establishing Omnibus Accounts on the licensed platform HashKey. Several brokerages (such as Futu, Tiger Brokers, ZhongAn Bank, etc.) adopt similar models and strictly limit the client range, for example, requiring clients to have Hong Kong or overseas identities and not accepting mainland residents for trading. Therefore, the seemingly hot regulatory breakthrough actually offers virtual asset services only to a small number of overseas investors. For most mainland residents, even with high interest, it is difficult to truly engage in this business. Even if they have the relevant identity, they still need to complete compliance tax information declaration and meet the compliance requirements of overseas capital channels, which is far too complex for ordinary investors to accomplish easily. Mainland users are isolated outside the institutional threshold, while overseas users are already accustomed to using international platforms with richer liquidity and products like Coinbase and Binance. Under this dual limitation, how Guotai Junan International can transform this new business into sustainable revenue still lacks a clear path. As for the fierce reaction from the capital market, it is more of a bet on future scenarios rather than a reflection of real profitability. Through this cooperation, brokerages provide clients with compliant market entry channels, exchanges provide trading and clearing support for brokerages, and native exchanges like HashKey can also attract large brokerage traffic by leveraging their licensed platform status, forming a complementarity. Thus, the market's bets will naturally extend to the related service providers and virtual asset exchange sectors — according to Nansen data, the HashKey platform token HSK has risen more than 50% in the past 24 hours, and OSL (00863.HK) saw its stock price rise 18% to 14.6 HKD on June 25, reaching a one-year high.

The hidden dangers of Guotai Junan International compliance path

In summary, the cryptocurrency business that made Guotai Junan International "emerge" essentially relies on the underlying service framework provided by HashKey. Whether it is trade matching, asset custody, clearing processes, or on-chain asset management, it essentially operates on the "comprehensive account" system built by HashKey. Guotai Junan International plays more of a role as a front-end channel and brand credibility in this process. In other words, this is a cooperative model of "brokerage + exchange": the brokerage provides client resources and licensed identity, while the exchange outputs technical capabilities and market depth. On the surface, this appears to be a reasonable division of labor that complements each other's advantages.

However, according to haocrypto101's supplement, there is actually a potential issue — once compliant exchanges expand their proprietary operations in the future or encounter technical failures and compliance disputes, the highly binding cooperative structure with brokers will make it difficult to cut risk exposure and control it independently. The direct consequence of this business separation is a decrease in trust and a lack of product control capabilities. Moreover, the near-monopoly position of HanshKey is due to the current regulations, where the Hong Kong Securities and Futures Commission (SFC) requires brokers holding a Type 1 license to have liquidity providers that are virtual asset trading platforms (VATP) holding a Type 7 license when offering virtual asset trading services. For a long time, there were only two compliant platforms in the Hong Kong market, HashKey and OSL, that held this license for connection. This has led to a highly concentrated choice among many brokers and financial institutions to access the services provided by these two platforms. Additionally, the current regulatory system design in Hong Kong, while ensuring compliance, has also somewhat suppressed market competition vitality. Currently, the number of compliant trading platforms available for connection is limited, resulting in overall insufficient liquidity and a certain gap in trading prices compared to mainstream markets in Europe and America. Therefore, many local investment institutions in Hong Kong have chosen to go directly to trading platforms in places like the United States to purchase cryptocurrencies in order to obtain better prices and deeper liquidity.

At the same time, brokerages are dissatisfied with the limitations of the existing trading service ecosystem. They hope to obtain more competitive prices and service quality in a compliant manner. Therefore, some institutions have chosen to apply for VATP licenses themselves and connect with global liquidity providers to enhance trading efficiency and customer experience, achieving business autonomy and differentiation.

Finally, the Chinese brokerage firm Guotai Junan International has been approved for a virtual asset trading service license in Hong Kong, marking an important step for traditional brokerage firms towards the integration of blockchain technology. This event indicates that under a strict regulatory framework, Hong Kong is striving to build a digital asset financial ecosystem that is both compliant and vibrant. At the same time, this event also reflects that the market is no longer solely focused on Bitcoin or altcoins, but is beginning to layout around "compliant virtual assets + financial infrastructure", such as stablecoins, tokenized bonds, and blockchain-based brokerages. Hong Kong is attempting to promote financial innovation through regulatory advantages, reclaiming its past financial center discourse. The implementation of the "Stablecoin Regulation" in May and the new licensing rules in August are further reserving regulatory space for offshore stablecoins. This approval for Guotai Junan allows licensed financial institutions and exchanges to become breeding grounds for stablecoin distribution channels. The over 10 trillion yuan offshore renminbi stock in Hong Kong can also provide a liquidity foundation for stablecoins, offering numerous opportunities for brokerages to join distribution channels. However, the current regulatory stance in mainland China remains very clear: cryptocurrencies like Bitcoin do not have legal tender status, and financial institutions and non-bank payment organizations are prohibited from providing account opening, fund transfer, and clearing services for virtual currency-related business activities. Therefore, for ordinary investors in mainland China wishing to participate in the crypto asset services offered in Hong Kong, they must first legally possess a Hong Kong account, and the source of funds and identity background must meet the regulatory scrutiny standards for offshore compliant funds. Even if these services are provided by compliant licensed institutions in Hong Kong, both Guotai Junan International and other firms like Futu and Tiger Brokers explicitly prohibit investors with mainland Chinese identities from opening accounts to participate in digital asset trading. However, looking at the evolution from institutional to individual participation in the Shanghai-Shenzhen-Hong Kong Stock Connect, qualified mainland investors (QDI, Hong Kong Stock Connect clients) may also be able to participate in virtual asset investments through regulatory-approved methods in the future.