The financial world is witnessing a pivotal shift as traditional brokerage firms step boldly into the digital asset arena. On June 24, Cathay Securities International (HK01788) announced it had received approval from the Securities and Futures Commission (SFC) of Hong Kong to upgrade its existing securities trading license to include virtual asset trading services and advisory capabilities.
This landmark move positions Cathay Securities International as the first mainland-backed securities firm in Hong Kong to offer comprehensive virtual asset services, including trading, investment advice, and the issuance and distribution of virtual asset-related products such as OTC derivatives.
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What the New License Means for Investors
With this upgraded license, clients can now trade major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), as well as stablecoins like Tether (USDT), directly through Cathay Securities International’s platform. This integration bridges the gap between conventional financial instruments and digital assets, offering investors a seamless way to diversify their portfolios.
The approval marks a significant milestone in Hong Kong’s ambition to become a global hub for virtual asset innovation. As part of the regulatory framework under the Securities and Futures Ordinance, firms must hold both Type 1 (Dealing in Securities) and Type 7 (Automated Trading Services) licenses to offer tokenized securities trading. Since June 2023, centralized platforms facilitating non-security token trades have also been required to obtain a Virtual Asset Service Provider (VASP) license or meet deemed licensing criteria under the updated Anti-Money Laundering regulations.
Strategic Moves Since 2024
Cathay Securities International didn’t arrive at this point overnight. The company began laying the groundwork in 2024 by launching structured products based on virtual asset spot ETFs—a first among Hong Kong-based brokers. That same year, it secured SFC approval to act as an introducing agent for virtual asset trading platforms.
By early 2025, the firm had further expanded its digital footprint by receiving regulatory confirmation to distribute tokenized securities and provide related advisory services. It also initiated its digital bond issuance business, signaling a broader transformation from a traditional broker to a full-service digital financial infrastructure provider.
Other financial institutions are following suit. Firms like Futu Holdings, ZhongAn Online, and Interactive Brokers have also obtained VASP licenses, reflecting a growing institutional embrace of blockchain-based finance.
Futu’s Managing Director, Zhiqiang Xie, noted rising client demand: “Since launching Bitcoin and Ethereum trading pairs against HKD and USD in August 2024, we’ve seen consistent growth in user engagement. Client interest spans both crypto-native investors looking to enter traditional markets and conventional investors seeking exposure to digital assets.”
This dual flow highlights a key trend: asset diversification across traditional and digital realms is no longer niche—it's becoming mainstream.
Industry-Wide Implications
The ripple effects of Cathay Securities International’s license approval extend far beyond one firm. Analysts at Huachuang Securities observe that this development—commonly referred to in Hong Kong as a “Type 1 license upgrade”—was achieved faster than expected, setting a precedent for other major players.
According to East Asia Securities, the approval validates a viable path for large Chinese brokerages with international arms—such as CITIC Securities, China International Capital Corporation (CICC), and China Merchants Securities International—to pursue similar upgrades. The strategic implications include:
- High-margin revenue streams: Crypto trading commissions typically exceed those of traditional equity brokerage.
- Cross-border settlement advantages: Leveraging stablecoins could reduce reliance on SWIFT, cutting costs and settlement times.
- Derivatives and structured product innovation: New opportunities in designing tokenized financial instruments.
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Building a Digital Financial Ecosystem
Beyond individual gains, this shift is catalyzing a broader transformation across the non-bank financial sector:
- Fintech firms are seeing increased demand for blockchain infrastructure, smart contract auditing, and on-chain compliance tools.
- Payment providers can integrate stablecoin clearing networks to enhance cross-border efficiency.
- Asset managers are launching tokenized funds—including money market funds, bond ETFs, and even REITs—that offer programmable yield generation.
East Asia Securities emphasizes that the future belongs to firms that build “cross-border digital financial infrastructure”, centered around two pillars:
- Clearing hubs using stablecoins for fast, low-cost international transfers.
- Securitization engines driving the tokenization of real-world assets (RWA), from corporate bonds to private equity.
These capabilities not only improve income diversity but also open new avenues for balance sheet growth through strategic allocation to digital reserves.
Frequently Asked Questions
Q: What is a VASP license?
A: A Virtual Asset Service Provider (VASP) license is issued by Hong Kong’s SFC to firms offering crypto trading, custody, or advisory services. It ensures compliance with anti-money laundering (AML) and investor protection standards.
Q: Can all Hong Kong brokers offer crypto trading now?
A: No. Only licensed firms—either through direct approval or deemed licensing—are permitted to provide virtual asset services. You can verify licensed entities via the SFC’s public register under “Virtual Asset Related Activities.”
Q: How does this affect investor portfolios?
A: Investors gain regulated access to digital assets within familiar brokerage environments, reducing counterparty risk while enabling diversified exposure to high-growth asset classes.
Q: Is this trend limited to Hong Kong?
A: While Hong Kong is leading in Asia, similar regulatory frameworks are emerging globally. Jurisdictions like Singapore, Switzerland, and the UAE are also advancing pro-innovation crypto policies.
Q: Will more Chinese brokerages follow?
A: Yes. Analysts expect top-tier mainland brokers with offshore subsidiaries to accelerate their applications, especially given Cathay’s successful precedent.
Q: Are there risks involved?
A: Regulatory compliance mitigates many risks, but market volatility and evolving oversight remain factors. Investors should assess their risk tolerance and seek professional advice when needed.
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The Road Ahead
Cathay Securities International’s achievement is more than a corporate milestone—it’s a signal of structural change in global finance. By integrating virtual assets into its core offerings, the firm has redefined what it means to be a modern investment platform.
As Hong Kong continues pushing toward its vision of becoming an international virtual asset center, expect increased competition, innovation, and collaboration across fintech, banking, and capital markets.
For investors and institutions alike, the message is clear: the convergence of traditional finance and decentralized technology isn’t coming—it’s already here.
Core Keywords: Virtual Asset Trading, VASP License, Cathay Securities International, Cryptocurrency Brokerage, Tokenized Securities, Stablecoin Clearing, Digital Asset Ecosystem, Blockchain Finance