Hong Kong's financial sector is accelerating its embrace of virtual assets as CMB International secured regulatory approval on July 14, becoming the first Chinese bank-affiliated brokerage to obtain a virtual asset trading license from the Securities and Futures Commission (SFC). This milestone expands the firm's existing Type 1 (securities dealing) and Type 4 (securities advising) licenses into the digital finance realm, unlocking cross-sector integration opportunities. The institution plans to incorporate virtual assets into diversified portfolios, study correlations with equity markets, and develop innovative strategies that will enable compliant cryptocurrency trading for investors.

This development echoes June's market frenzy when Guotai Junan International upgraded its Type 1 license for virtual asset services. The announcement triggered a seismic market reaction: Guotai Junan International (01788) soared nearly 200% on June 25, propelling the Hong Kong Chinese Brokerage Index up 11.75% in a single session. A-share brokers including Tianfeng Securities hit exchange-imposed upside limits while East Money surged over 10%.

The ripple effect continued on July 15 as China Merchants Securities H-shares (06099) opened 15% higher following CMB International's news, eventually closing up 4.43% at HK$15.88. Stablecoin concept stocks outperformed with a 5.18% sector-wide gain, leading all market segments.

Hong Kong's licensing framework operates through three distinct pathways under its "dual-track" system: - Virtual Asset Trading Platform (VATP) licenses requiring concurrent SFC Type 1/7 and AMLO VASP approvals - Traditional brokerage upgrades: Type 1 (virtual asset trading via omnibus accounts), Type 4 (investment advice), and Type 9 (funds with >10% virtual assets) - Stringent stablecoin issuance permits from the HKMA emphasizing real-world utility

By July 2025, regulatory clarity has yielded 11 operational VATP licensees including pioneers like OSL and HashKey alongside broker-affiliated platforms PantherTrade (Futu) and YAX (Tiger Brokers). Eight applicants remain in the pipeline including Crypto.com and Bybit. Concurrently, 42 brokerages completed Type 1 upgrades, 37 obtained Type 4 enhancements, and 40 asset managers secured Type 9 expansions.

Nankai University professor Tian Lihui outlined four strategic pillars for brokerages entering stablecoins: facilitating tokenized bond issuance with custody services, establishing stablecoin-settled secondary markets, creating yield-based structured products, and delivering cross-border regulatory advisory. These align with Hong Kong's accelerating policy momentum following its June 2025 "Policy Declaration 2.0" that introduced the LEAP framework - optimizing regulations, expanding tokenization, advancing infrastructure, and developing talent.

The Real World Assets (RWA) market ballooned to $24.4 billion by June 30, growing 5.7% monthly, as corporate giants joined the fray. JD.com targets a Q4 stablecoin launch backed by a transparent custody system developed with Airstar Bank - itself backed by Xiaomi (50.3%) and Futu Holdings (44.1%). Ant Group, Rupee Innovation, and Standard Chartered Hong Kong round out the heavyweight contenders.

This compliance-driven transformation is reshaping non-bank finance valuation models, creating premium revenue streams while enabling participation in stablecoin ecosystems and RWA tokenization. Huachuang Securities notes the rally remains policy-driven, urging investors to track two catalysts: Hong Kong's Web3.0 infrastructure progress and financial institutions' license upgrades. Early-mover Chinese brokerages and digitally-native platforms appear best positioned to capture this frontier growth.