CMB International Securities Secures Hong Kong Crypto License

China Merchants Bank’s brokerage arm, CMB International Securities (CMBI), has secured a virtual asset license from Hong Kong’s Securities and Futures Commission (SFC). This makes CMBI the first mainland China-connected brokerage to be approved to offer crypto trading in Hong Kong. The license covers a range of services, including cryptocurrency trading, custodial services, and advisory services, all of which must comply with Hong Kong’s strict regulatory framework.

This development is part of Hong Kong’s broader strategy to establish itself as an international crypto hub. The region has been actively working to attract major digital asset players by implementing new regulations. While Beijing supports these efforts, it is important to note that crypto trading remains prohibited in mainland China. Therefore, mainland investors cannot directly trade in Hong Kong using this new channel.

Joshua Chu, a Hong Kong-based lawyer and co-chair of the Hong Kong Web3 Association, highlighted that this license demonstrates a cautious balance. CMBI is allowed to enter the Hong Kong crypto market but must adhere to stringent regulations, excluding mainland investors. This indicates that China is interested in supporting Hong Kong’s development in the crypto space without violating its ban on crypto trading in the mainland.

The Hong Kong government is continuing its efforts to foster a robust crypto environment. The Financial Services and the Treasury Bureau (FSTB) and the SFC launched a public consultation in late June, seeking community opinions on proposed laws that would license companies transacting in digital assets or providing custody services. This consultation is set to end on August 29.

Christopher Hui, the FSTB Secretary, emphasized that the goal is to make Hong Kong one of the leading centers for digital assets globally. A new city stablecoin law, set to begin on August 1, is already in preparation. The Hong Kong Monetary Authority will start accepting license applications for stablecoin issuers from that date. Over 40 companies have already expressed interest in acquiring these licenses, indicating significant market potential.

This license is a major step for CMBI, allowing the firm to expand its services and demonstrate to other mainland-related companies that they can also operate in Hong Kong under clear regulations. However, they must not disregard the ban on crypto trading in mainland China. The approval of CMBI is a significant milestone in Hong Kong’s vision to become a reliable hub for crypto activities, attracting international crypto-related businesses through safe and legal methods for trading in digital assets. CMBI’s leadership in this area paves the way for more licensed crypto activities in the Asian financial center.