The recent approval for major brokerages to upgrade their licenses and officially enter the digital asset market has generated significant discussion. Since the introduction of the licensing upgrade system by the Securities and Futures Commission (SFC) in 2023, several brokerages have successfully upgraded, with early entrants now developing comprehensive business ecosystems and becoming key drivers in the market.
As one of the first batch of brokerages to receive upgraded licenses in September 2023, one financial group has been actively expanding its virtual asset business over the past year. Today, it not only operates steadily in digital asset trading and market making but is also actively developing real-world asset (RWA) services, providing comprehensive solutions for retail investors, professional traders, and corporate clients.
The First-Mover Advantage of Licensed Brokerages
Securing an upgraded license from the SFC not only validates a brokerage’s compliance and expertise in the digital asset market but also opens up broader opportunities for market participation.
In 2024, Hong Kong launched the world’s first batch of Ethereum spot ETFs and Asia’s first Bitcoin spot ETFs. One securities and futures firm was among the few brokerages participating in these ETFs, assisting with primary market creation and redemption to ensure smooth transactions. It was also one of the first brokerages in Hong Kong to offer in-kind subscription and redemption services, allowing investors to use Bitcoin or Ethereum for ETF transactions, significantly enhancing market flexibility and liquidity. Additionally, it was among the first to provide margin financing services for virtual asset spot ETFs, enabling clients to leverage their holdings for greater investment flexibility.
The Head of Virtual Assets at the group commented: “As one of the first licensed brokerages, we not only bear the responsibility of market development but also aim to set a benchmark for Hong Kong’s digital asset market through innovation and compliance.”
Robust Partnerships and Technological Support
Over the past year, the group has deepened collaborations with licensed exchanges to promote the adoption of cryptocurrency trading. By providing round-the-clock liquidity support and leveraging a robust technological platform, it has significantly improved trading efficiency and market depth.
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Breakthroughs in Market Making and Stablecoin Applications
In May 2025, Hong Kong’s Legislative Council passed the Stablecoin Bill, providing a clear regulatory foundation for the stablecoin market. The group quickly responded by partnering with industry leaders to explore stablecoin applications in settlement and cross-border payments, reinforcing Hong Kong’s status as an international financial hub.
The Head of Virtual Assets noted: “Stablecoins are not only a vital component of the digital asset market but also a key bridge connecting traditional finance with the digital economy. We believe stablecoins will be a major engine driving the globalization of the digital economy.”
Embracing RWA: Deep Integration of Digital and Traditional Finance
Building on its steady progress in the digital asset market, the group is now focusing on the real-world asset (RWA) sector. RWA involves digitizing traditional physical assets—such as real estate and bonds—and integrating them into the blockchain ecosystem, unlocking new application scenarios for the digital asset market.
The SFC’s “A-S-P-I-Re” roadmap and the government’s “Hong Kong Digital Asset Development Policy Declaration 2.0” emphasize sustainable liquidity as a core foundation for market growth. In response, the group plans to launch RWA product distribution and market-making services covering real estate, bonds, and other physical assets.
The Head of Virtual Assets stated: “The combination of digital asset market making and RWA services will be a key driver of innovation and sustainable development in Hong Kong’s financial market. This strategy not only enriches investors’ asset allocation options but also enhances overall market efficiency and risk management capabilities.”
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Future Outlook: Global Vision for Hong Kong’s Digital Asset Market
As a comprehensive financial group, its development strategy aligns closely with Hong Kong’s push for a compliant and internationalized digital asset market. Moving forward, the group will continue to integrate fintech resources, strengthen collaborative innovation with industry partners, and promote the deep integration of digital and traditional finance, helping Hong Kong maintain a leading position in the global digital asset landscape.
Frequently Asked Questions
What is a licensed digital asset brokerage?
A licensed digital asset brokerage is a financial institution authorized by regulatory bodies like the SFC to offer services such as trading, custody, and market making for digital assets. Licensing ensures compliance, security, and professionalism in the rapidly evolving market.
How do in-kind subscriptions for ETFs work?
In-kind subscriptions allow investors to use underlying assets—like Bitcoin or Ethereum—instead of cash to create or redeem ETF shares. This method enhances liquidity, reduces transaction costs, and provides greater flexibility for investors holding digital assets directly.
What are the benefits of RWA tokenization?
Tokenizing real-world assets (RWA) enables fractional ownership, improves liquidity for traditionally illiquid assets like real estate, and allows for faster, more transparent transactions. It also opens new investment opportunities and enhances portfolio diversification.
Why are stablecoins important in digital finance?
Stablecoins offer the stability of fiat currencies combined with the efficiency of blockchain technology. They facilitate seamless cross-border payments, reduce settlement times, and serve as a reliable medium of exchange and store of value within the digital asset ecosystem.
How does margin financing work for digital asset ETFs?
Margin financing allows investors to borrow funds using their existing ETF holdings as collateral. This enables leveraged positions, potentially amplifying returns, and provides greater capital efficiency while maintaining exposure to the digital asset market.
What is Hong Kong’s role in the global digital asset market?
Hong Kong is emerging as a key hub for digital asset innovation, thanks to its clear regulatory framework, robust financial infrastructure, and strategic focus on integrating traditional and digital finance. It aims to attract global investors and foster sustainable market growth.