Hong Kong Digital Asset New Era: Opportunities and Challenges of Transforming TradFi

Recently, the Hong Kong financial market has witnessed a significant breakthrough in the digital asset sector. A well-known Chinese brokerage firm has obtained the first full license for virtual assets in Hong Kong, triggering a warm response from the market. The company's stock price increased by a total of 466% within just three trading days, demonstrating investors' immense confidence in the prospects of the digital asset business.

Following closely, several brokerages have also announced the completion of the upgrade of License No. 1, further boosting positive market sentiment. Meanwhile, the Hong Kong SAR government released the latest version of the "Hong Kong Digital Asset Development Policy Declaration," providing strong policy support for the development of the digital asset industry. This series of events marks the official entry of Hong Kong's capital market into the digital asset era, where the integration of TradFi and emerging technologies has entered a substantive stage.

Hong Kong is accelerating its efforts in building a digital asset ecosystem. In May of this year, the "Stablecoin Regulation Draft" was passed and officially became law, marking the world's first comprehensive regulatory framework for fiat-backed stablecoins. The Hong Kong Securities and Futures Commission is also actively promoting the implementation of the relevant licensing system, with 41 companies successfully upgrading to obtain virtual asset licenses. These measures have not only attracted significant capital inflow but also demonstrated Hong Kong's determination to establish itself as a global digital asset innovation center.

However, not all traditional brokers can seize the opportunity in this transformation. Early layout and compliance awareness will become key success factors. Institutions that can seize opportunities in a timely manner are actively engaging in digital asset-related businesses, including ETF and futures brokerage, over-the-counter derivatives issuance and distribution, introduction and agency of virtual asset trading platforms, and digital bond issuance, among other areas.

Against the backdrop of sluggish growth in traditional businesses, digital asset operations are becoming an important engine for brokerages seeking transformational breakthroughs. The high activity levels brought by high-frequency trading users have significantly increased platform traffic and onboarding efficiency, along with diverse revenue sources such as trading commissions, creating a relatively independent new growth curve for brokerages, separate from the fluctuations of traditional capital markets.

However, to succeed in this emerging field, institutions need to possess four key capabilities: a strong compliance awareness, robust technical strength, a wide customer base, and a risk control system that adapts to the characteristics of digital assets. Currently, several large brokerage firms' subsidiaries in Hong Kong are actively following up on license applications, and the market is full of anticipation for these potential new entrants.

Despite the high market sentiment, we also need to remain calm and think clearly. As more institutions obtain licenses, the initial scarcity will gradually fade. From "obtaining qualifications" to "operating well," and from "policy-driven" to "capability-driven," the entire industry is entering a deeper phase of reshuffling.

Digital assets are not just an opportunity for the capital markets, but a deep participation in the reconstruction of the global financial order. Institutions that can maintain a robust business structure after the boom will have the chance to define the standards for the next generation of financial platforms. In this new era filled with challenges and opportunities, traditional financial institutions need to prudently and decisively seize the transformation opportunities to lay a solid foundation for future development.