- CMBI becomes first mainland brokerage licensed for Hong Kong crypto services.
- License covers trading, custody, advisory under Hong Kong’s strict crypto rules.
- Beijing supports Hong Kong crypto push without breaking the mainland trading ban.
China Merchants Bank’s brokerage arm, CMB International Securities, has made history. This week, CMBI announced that it has received a virtual asset license from Hong Kong’s Securities and Futures Commission (SFC). This will make CMBI the first mainland China-connected brokerage to be approved to offer crypto trading in Hong Kong.
CMBI Wins License for Crypto Trading, Custody, Advisory in Hong Kong
First of all, this license enables CMBI to perform extensive services connected with crypto. It can now offer cryptocurrency trading, custodial services, and advisory services in the tight legal regime in Hong Kong. Besides, CMBI may assist its clients in risk management, maintaining compliance with the rules, and investment strategy planning.
This is not something that came about in a single night. It is happening as Hong Kong attempts to establish itself as an international crypto hub. The city has also come up with new regulations to attract big digital asset players in recent years. Beijing supports such steps silently. It is necessary to mention, though, that the trading of crypto is still prohibited in mainland China. Thus, the investors in China cannot trade directly in Hong Kong using this new channel.
Joshua Chu, a Hong Kong-based lawyer and co-chair of the Hong Kong Web3 Association, said that this license demonstrates a cautious balance. He added that although CMBI is now allowed to enter the Hong Kong crypto market, it will have to observe stringent regulations, excluding mainland investors. This indicates that China is interested in supporting Hong Kong to develop in crypto without violating its ban in the country.
Moreover, the government of Hong Kong is not going to rest here. The Financial Services and the Treasury Bureau (FSTB) and the SFC launched a simultaneous public consultation in late June. They are seeking the opinion of the community on the proposed laws that would license companies that transact in digital assets or custody services. The consultation will end in August 29.
New Stablecoin Law to Start August 1; Licenses Open for Issuers
According to FSTB Secretary Christopher Hui, the goal is clear. He added that the government is interested in making Hong Kong one of the leading centers of digital assets in the world. The new city stablecoin law, which will begin on August 1, is already being prepared. The Hong Kong Monetary Authority will start to accept license applications of stablecoin issuers starting that day.
Large companies are already taking interest in this emerging interest. Hui disclosed that over 40 companies have inquired regarding the acquisition of licenses. This is an indication that the market has a lot of potential in the Hong Kong strategy to become a reliable hub in crypto.
This license is a huge move in the case of CMBI. It will assist the firm to extend its services and to demonstrate to the other mainland-related companies that they can also take up businesses in Hong Kong with clear regulations. They should, however, not disregard the ban on crypto trading in China.
Finally, the approval of CMBI is one of the ways the crypto vision of Hong Kong is becoming a reality. Hong Kong is trying to attract international crypto-related businesses by developing safe and legal methods to trade in digital assets. CMBI is a leader at the moment, and this opens the way for more licensed crypto activity in the Asian financial center.
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