Over the past few days, news that a domestic brokerage’s overseas subsidiary has obtained a crypto asset trading license in Hong Kong has stirred considerable excitement in both mainland China and Hong Kong. The buzz was so intense that it even drove up the stock prices of related companies in the Hong Kong and A-share markets.
What caused the stir was that Guotai Junan International, a subsidiary of Guotai Haotong, officially received approval to offer crypto asset trading services in Hong Kong. This marks the first Chinese state-backed brokerage to obtain such a license.
Unlike other compliant crypto exchanges with Chinese backgrounds—such as HashKey—this is a brokerage firm entering the space. For brokerages, acquiring a crypto license represents a business expansion, which sparks broader speculation about its future potential. Additionally, the name “Guotai Junan” inevitably raises questions about whether this signals a softening stance by mainland China on crypto.
My view remains cautious.
Whether it’s past hype over stablecoin-related companies or this recent news, I see it more as an expression of optimism and heightened expectations for the future.
There is a general hope that, as a global free port, Hong Kong could secure a place in the global crypto ecosystem and attract worldwide participants.
But to compete globally, Hong Kong’s direct competitor is the United States. At present, the U.S. far surpasses Hong Kong in terms of regulatory environment and user base.
In terms of regulation, U.S. policies are considerably more relaxed, and its crypto infrastructure is far more developed.
In terms of user base, the domestic market alone in the U.S. is large enough to support ambitious crypto applications. Hong Kong, in contrast, cannot rely on its local population size.
Thus, Hong Kong’s real opportunity lies in attracting potential users from outside—namely, mainland China’s 1.4 billion population. That’s the true source of the optimism and expectations surrounding Hong Kong’s crypto future.
However, due to strict capital controls in mainland China, it’s difficult to translate that potential into actual market gains.
Recently, the mainland opened up direct cross-border bank transfers between China and Hong Kong. Many media outlets touted this as a sign of easing capital controls. But in truth, it only improved efficiency and lowered costs; the cap on cross-border fund transfers remains unchanged.
Just two years ago, mainland residents could walk into a HSBC branch and open a Hong Kong bank account on the spot. Today, that process has been halted. Applications are now online-only, and same-day card issuance is no longer possible.
These details indicate that capital controls have not been relaxed.
Furthermore, Hong Kong has long enforced strict KYC (Know Your Customer) policies on crypto trading. For example, the well-known compliant exchange HashKey still only allows account applications from Hong Kong residents, permanent residents, or mainland Chinese citizens with legal overseas status.
Even if mainland residents manage to obtain a Hong Kong bank card, crypto asset transactions through these banks are still strictly regulated.
So far, there are no signs of loosening, and I don't expect any changes in the near future.
As long as capital controls and identity verification remain in place, China’s 1.4 billion population will remain a “moon in the water” or “flower in the mirror”—visible but unreachable.
Of course, this doesn’t mean Hong Kong’s policies are useless. They do have value and can greatly support financial institutions in business expansion and innovation. But there is a wide gap between their actual effect and the full potential many imagine. That gap inevitably leaves a sense of disappointment.
Moreover, when we see countries on the other side of the world sprinting ahead in this race, and a nearby free port still seemingly constrained, it’s hard not to feel a lingering sense of frustration.