Policy Winds Create New Opportunities: Brokerages Pivot to Crypto Finance
Hong Kong's release of the Digital Asset Development Policy Declaration 2.0 on June 26 marks a pivotal shift, establishing the "LEAP" framework to position the city as a global digital asset hub. This move has ignited unprecedented activity among local brokerages venturing into crypto-related services.
Market Response Highlights Investor Confidence
Stock Surges:
- Guotai Junan International (GTJAI), the first Chinese-backed Hong Kong brokerage to offer full-scale virtual asset trading, saw its shares spike from HK$1.24 to HK$7.02 before settling at HK$3.54.
- The broader Hong Kong Chinese Brokerage Index jumped 11.75%, with Tianfeng International (backed by Tianfeng Securities) and Victory Securities (enabling crypto-in/crypto-out transactions) also recording significant gains.
Innovation Milestones:
- GF Securities (HK) launched "GF Token," Hong Kong’s first daily redeemable tokenized security—a private money market fund for institutional investors.
The LEAP Framework: Four Pillars of Transformation
- Legal Clarity (L)
Enhanced regulatory frameworks provide brokerages with clear guidelines for virtual asset trading, custody, and issuance. - Ecosystem Integration (E)
Brokerages act as bridges between traditional finance and Web3, offering services like tokenized asset wealth management and crypto-linked investment banking. - Asset Expansion (A)
Tokenization of real-world assets (RWA)—from commodities to green energy—opens new revenue streams. Expect more tokenized bonds, funds, and structured products. - Partnerships (P)
Global collaborations with digital asset platforms and tech providers will amplify Hong Kong’s competitive edge.
Challenges and Opportunities for Brokerages
Market Pressures:
- 37 brokerages ceased operations in 2024 amid a sluggish Hong Kong stock market.
- Intense competition and thin margins push firms toward crypto diversification.
Regulatory Progress:
- 41 institutions upgraded to "Type 1" licenses (virtual asset trading), including Futu Securities and Tiger Brokers.
- 37 secured "Type 4" (crypto advisory), and 40 asset managers obtained "Type 9" (virtual asset funds).
The Road Ahead
- Product Innovation: Smart contract-enabled derivatives, automated strategies, and seamless fiat-crypto exchanges will redefine services.
- Competitive Landscape: Brokerages must contend with crypto-native exchanges while educating clients and refining risk controls.
👉 Explore how Hong Kong is shaping the future of finance
FAQs
Q: What is the LEAP framework?
A: Hong Kong’s strategic blueprint covering Legal, Ecosystem, Asset, and Partnership initiatives to advance its digital asset hub ambitions.
Q: Which brokerages lead in crypto adoption?
A: GTJAI, GF Securities, and Victory Securities are early movers, with licenses for trading, tokenization, and advisory services.
Q: How does tokenization benefit investors?
A: It enhances liquidity, enables fractional ownership, and integrates traditional assets with blockchain efficiency.
Q: Are crypto services available to retail investors?
A: Currently, offerings like GF Token target institutions, but expect broader access as regulations mature.