China essentially banned cryptocurrency years ago. Now, as local regulators see a stable potential, demand for holes has been found in the Hong Kong market. Shares of Gutai Junan International, traded in Hong Kong, almost tripled on Wednesday after becoming the first securities brokerage backed by mainland China to obtain licenses for cryptocurrency trading in Hong Kong. According to Wind Information, many mainland-based investors purchased Hong Kong-listed stocks on Wednesday and Thursday, which first ranked Guotai’s total trading value beyond Alibaba’s exchanges. Guotai placed second on Friday, and handed over the top trading spot to Xiaomi after the electric car was launched on Thursday night, data showed. As a specially controlled region of China, Hong Kong operates under various financial regulations and allows for Bitcoin trading. In late May, the region passed the Stablecoin bill to formalize the process by which financial companies issue and manage virtual assets, primarily government-issued or referencing Fiat’s currency. “We believe that the renewed interest in China’s stubcoin is driven by concerns that US stubcoin laws can extend dollar control,” Morgan Stanley’s chief China economist Robin Singh and his team said in a June 19 report. The People’s Bank of China is “exploring HK as a sandbox for future payment alternatives,” the company said. Analysts pointed out that Beijing has banned crypto trading in mainland China since 2021, but PBOC Governor Pangong Shen’s famous mid-June speech “shows a pivot.” PAN highlighted Stablecoins and highlighted how digital technology reveals the weaknesses of traditional payment systems, analysts at Morgan Stanley pointed out. Growth trends among other Chinese companies jump towards this trend. Hong Kong-listed financial services company China Renaissance announced on Thursday it plans to spend $100 million over the next two years to invest in cryptocurrency assets and develop businesses in the associated Web3.0 territory. On the same day, the company announced that Frank Fu, former CEO of Crypto Exchange Huobi Americas, will join China Renaissance as an independent non-executive director. The Chinese Renaissance, also known as CR Holdings, won a 20% stake last week. On the mainland where stock trading is subject to more price restrictions, Shanghai-listed TF securities earned nearly 29% last week after confirming investors on Friday that its wholly owned subsidiary TF International has obtained a license in Hong Kong for trading virtual assets. According to Wind data, TF securities and popular financial information and brokerage Eastmoney saw its biggest sales in stock volume and price in the mainland exchange last week, while Eastmoney did not share virtual asset-related business updates. That inventory rose by about 11% last week. Beware of the drivers behind the recent surge in shares. Last week’s Gutai stock leap reflects the market’s positive expectations for Beijing-based financial blogger Li Dongfang, translated by CNBC in Chinese. However, the surge in stock prices is caused by investors who pursue new themes and pursuing pioneer advantages, rather than reflecting new business growth. He hopes that more brokerages will get similar approvals for their virtual asset businesses as well, and there will not be any such major fluctuations in stock prices. Part of Beijing’s driving force to ban crypto transactions has been efforts to control financial risks. Speculation takes a different form with a population of 1.4 billion. However, if not accelerated, macro trends are clear. The consensus of the Cryptocurrency Conference, designed in New York, expanded to Hong Kong this year with its first event in the region in February. Another consensus event is planned in Hong Kong next year. Recent Chinese Business News Reports scrutinize the potential for stable sales in the sale of overseas products via online platforms. They also emphasize that the unit of Chinese e-commerce company JD.com, along with standard charters, is one of the people officially taking part in the Stablecoin project in Hong Kong. “For China, ignoring this trend is risky left in digital infrastructure races, particularly as Sadaya is increasingly acting as a bypass mechanism to traditional banking networks,” said an analyst at Morgan Stanley.
