CMB International Securities (CMBI), the brokerage division of China Merchants Bank, has officially obtained a virtual asset license from the Securities and Futures Commission (SFC) in Hong Kong, as reported by the South China Morning Post.
The license was awarded on Monday, marking CMBI as the first brokerage from mainland China to facilitate cryptocurrency trading services in the special administrative region.
With this new authorization, CMBI can now provide trading, custody, and advisory services related to virtual assets. Additionally, the license enables the firm to offer guidance on investment strategies, risk management, and ensure regulatory compliance.
Joshua Chu, a lawyer and co-chair of the Hong Kong Web3 Association, commented that obtaining this license affords CMBI access to Hong Kong’s vibrant crypto market. However, he noted the necessity for the company to adhere to strict regulations that prevent direct participation from mainland China, reflecting the nuanced balance between innovation and legal framework.
The report also highlighted an uptick in interest from mainland brokers looking to engage global investors by acquiring virtual asset licenses in Hong Kong.
According to the SCMP, licensed mainland brokers are permitted to establish omnibus accounts on the eleven licensed crypto trading platforms in Hong Kong. These accounts consolidate the assets of multiple clients under a single intermediary account, offering users access to leading cryptocurrencies and stablecoins.
In related news, Hong Kong is currently processing license inquiries from over 40 companies as it prepares for its new stablecoin regulations, based on a report by Yicai.
Set to take effect on August 1, the Stablecoin Bill will allow the Hong Kong Monetary Authority (HKMA) to start accepting official applications.
Prominent companies such as JD.com, Ant Group, Standard Chartered, and Circle have publicly expressed intentions to apply for these stablecoin licenses.
“Striving to Build Hong Kong into Premier Global Hub”
Several key factors are contributing to Hong Kong’s emergence as a significant player in the global digital asset landscape.
One influential element is the growing integration of digital assets within traditional financial institutions, as the crypto industry increasingly intersects with both technology and financial sectors.
Over recent years, Hong Kong has been diligently advancing its initiatives surrounding virtual assets, positioning itself as a prominent crypto hub.
It’s important to note that while these initiatives receive backing from mainland China, the services CMBI can provide in Hong Kong remain prohibited on the mainland.
A joint public consultation regarding legislative proposals for licensing regimes aimed at digital asset dealing and custodian service providers is underway and will continue until August 29, as announced by the Financial Services and the Treasury Bureau (FSTB) and the SFC.
Christopher Hui, Secretary for FSTB, emphasized the government’s commitment to positioning Hong Kong as a premier global hub for digital assets.
The anticipated stablecoin ordinance will come into effect on August 1, coinciding with the HKMA’s commencement of formal application acceptance. The government is currently managing interest from over 40 companies seeking licenses.
GTJA, which was formed from the merger of two major Chinese brokerage firms, recently received its license to trade crypto assets. However, it remains uncertain how much revenue this new aspect of their business will generate.
Hong Hao, an economist and managing partner at Lotus Asset Management, forecasts that the market value of stablecoins could exceed $1 trillion shortly. He suggests that stablecoins issued in Hong Kong may exhibit greater stability than those from the U.S., pointing to the region’s clear regulatory environment and resource foundation.
According to Hong Kong Special Administrative Region (SAR) Financial Secretary Paul Chan Mo-po, there is a rising interest in the digital asset space. As the market for digital assets and stablecoins continues to gain momentum, Hong Kong is set to emerge as a key destination for both crypto and traditional financial players.
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