Brokerage Valuation Soars as Virtual Asset Expansion Unlocks New Growth

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The financial world is witnessing a transformative shift as traditional brokerage firms step boldly into the realm of digital assets. On June 24, a landmark development sent shockwaves through the market: Guotai Junan International Holdings Limited, a subsidiary of the Guotai Haitong Group, officially received approval from the Hong Kong Securities and Futures Commission (SFC) to upgrade its existing securities trading license. The new license now permits the firm to offer virtual asset trading services — including major cryptocurrencies like Bitcoin and Ethereum, as well as stablecoins such as Tether (USDT) — and to provide investment advice related to these digital assets.

This regulatory milestone marks a pivotal moment in the convergence of traditional finance and the digital asset economy. Investors responded swiftly. Hong Kong stocks opened sharply higher, with the Hang Seng Index rising 0.62% and the Hang Seng Tech Index climbing 0.9%. Guotai Junan International’s share price surged over 14% at opening, briefly spiking more than 100% intraday before settling with a gain exceeding 60%. The rally underscored growing market confidence in brokers that are positioning themselves at the forefront of financial innovation.

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A New Era for Brokerage Firms: From Transaction Channels to Financial Gateways

The significance of this move extends far beyond one company’s licensing success. It signals a potential fundamental transformation in the role of investment banks and brokerage houses. No longer confined to being mere transaction facilitators, forward-thinking financial institutions are evolving into asset tokenization engines and cross-border clearing hubs.

Stablecoins, in particular, are emerging as a key catalyst for this shift. These digital assets, pegged to fiat currencies like the U.S. dollar or potentially even the Chinese yuan, offer fast, low-cost settlement across borders — a feature that aligns perfectly with global capital markets’ need for efficiency.

Consider the case of China Everbright Holdings, which saw its stock surge over 50% on speculation of an investment in Circle, the issuer of USD Coin (USDC). The momentum spilled over to Everbright Securities, which briefly hit its daily trading limit. Similar rallies were observed in other financial tech players like Huaguan Capital, LianLian Digital, and ZhongAn Online — all benefiting from market excitement around stablecoin integration.

This isn't just speculative fervor; it reflects real valuation potential. As stablecoins gain regulatory acceptance and institutional adoption, their integration into mainstream financial infrastructure could unlock trillions in liquidity and redefine how capital moves globally.

The Strategic Shift: Why This Isn’t Just Hype

While mainland Chinese brokers remain restricted from direct stablecoin operations under current regulations, their international arms — like Guotai Junan International — are now free to explore new revenue streams. This creates a dual-track strategy: domestic stability paired with offshore innovation.

According to Huatai Securities, the current wave of balance sheet expansion among Chinese brokerages (2023–2024) is not merely cyclical but strategic. Driven by a favorable bond market and pressure on light-capital businesses, firms are actively increasing their fixed-income investments to boost performance. Unlike previous adjustments during 2018–2019, this round reflects deeper structural changes — suggesting longer-term sustainability.

Between 2023 and 2024, listed Chinese brokers increased their fixed-income investment规模 by 704.4 billion yuan. The top four contributors — CITIC Securities, Guotai Haitong, CICC, and China Merchants Securities — accounted for 58% of that growth, adding 405.2 billion yuan collectively. Mid-tier players like Everbright Securities and Industrial Securities also expanded aggressively, each growing their fixed-income portfolios by over 40 billion yuan.

But what makes this expansion truly compelling is its synergy with digital asset trends.

Stablecoins and the Future of Treasury Markets

Today, stablecoins represent approximately $220 billion** in global value. Even if only a fraction of that is deployed into short-term government securities, the impact is significant. Huatai Securities estimates that if all stablecoin reserves were invested in 3-month U.S. Treasury bills, annual trading volume could reach nearly **$900 billion — about 2% of total U.S. short-term Treasury transactions in 2024.

More importantly, projections suggest explosive growth ahead. The U.S. Treasury Borrowing Advisory Committee (TBAC) estimated in May 2025 that stablecoin supply could grow eightfold to $2 trillion within three years. As this happens, stablecoin issuers will become major players in the money markets, effectively acting as institutional-grade buyers of government debt.

This dynamic opens up a new frontier for offshore RMB development. With approximately 263.8 billion yuan worth of outstanding offshore Chinese government bonds, there’s a ready-made pool of high-quality assets that could serve as reserve backing for RMB-denominated stablecoins — accelerating RMB internationalization and creating new demand for Chinese financial instruments abroad.

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FAQs: Understanding the Brokerage-Digital Asset Shift

Q: Can Chinese brokers now trade cryptocurrencies domestically?
A: Not yet. Current regulations restrict cryptocurrency trading within mainland China. However, subsidiaries operating in regulated international markets like Hong Kong can offer virtual asset services under approved licenses.

Q: What’s the difference between a regular brokerage and one offering virtual asset services?
A: Traditional brokers facilitate trades in stocks, bonds, and funds. Those with virtual asset licenses can also enable clients to buy, sell, and manage digital currencies and stablecoins — expanding service offerings and opening new fee-based revenue streams.

Q: Why are stablecoins so important for financial institutions?
A: Stablecoins enable faster settlements, lower transaction costs, and seamless cross-border transfers. For banks and brokers, they represent a bridge between traditional finance and blockchain-based systems, enhancing liquidity and operational efficiency.

Q: Will more Chinese brokerages follow Guotai Junan’s lead?
A: It’s highly likely. With strong precedent set and clear valuation benefits demonstrated, other major brokers with international presence — such as CICC or CITIC — may pursue similar licensing upgrades in Hong Kong or other compliant jurisdictions.

Q: Could RMB-backed stablecoins emerge from this trend?
A: Yes. While fully private RMB stablecoins aren’t permitted under current policy, there’s growing interest in using offshore RMB bonds as collateral for regulated digital currency products — possibly paving the way for CBDC-linked or institution-backed solutions.

The Road Ahead: Expansion Meets Innovation

The convergence of balance sheet growth and digital asset adoption is creating a powerful tailwind for select brokerage firms. While not every player will capitalize equally, those with strong international platforms, regulatory foresight, and strategic agility stand to benefit most.

Guotai Junan International’s breakthrough isn’t just a one-off event — it’s a blueprint for how traditional finance can adapt and thrive in the digital age. As stablecoin adoption accelerates and regulatory clarity improves across Asia and beyond, expect more institutions to follow suit.

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For investors, this means reassessing brokerage valuations not just based on P/E ratios or trading volumes, but on digital readiness, offshore capability, and potential exposure to high-growth virtual asset ecosystems.

In short, the era of passive brokerage models is ending. The next chapter belongs to those who can act as both custodians of capital and gateways to innovation.

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