"Broker + Crypto" Opens Valuation Potential — Shanghai Asset Regulator Sends Friendly Signal, Broker Indices Surge 15%

TradingKey - With global stablecoin regulation gradually taking shape, Guotai Junan International and other brokerages are positioning themselves for a new wave of crypto integration. A recent policy-driven rally in Hong Kong-listed Chinese brokers was further fueled by the Shanghai SASAC hosting a special learning session on cryptocurrencies and stablecoins, sending brokerage stocks to their best single-day performance in nine months.

On July 11, a Bloomberg index tracking listed brokerages in Hong Kong surged as much as 15%, marking its biggest jump since mid-October 2024. Among individual names, Central China Securities (1375.HK) jumped 76% intraday, while GuoLian Minsheng Securities (1456.HK) rose 35%.

Two Drivers Behind the Rally

The surge reflects two key market dynamics:

1. Continued optimism from the broader Chinese equity market hitting fresh yearly highs — with the Shanghai Composite breaking above 3,500 points
2. Growing expectations that Chinese regulators may adopt a more crypto-friendly stance, and that securities firms could soon expand into digital asset trading

On July 10, the Party Committee of the Shanghai State-owned Assets Supervision and Administration Commission (SASAC) held a study session focused on the development trends and regulatory responses related to cryptocurrencies and stablecoins.

A senior family office executive noted that investors are betting more brokers will be granted upgraded licenses to offer virtual asset trading services — which would unlock new profit streams for these firms.

If realized, this move could mark a major step forward for China’s financial sector in the digital asset era.

Banking Sector Also Stands to Benefit

The banking sector is also expected to benefit from this trend. Embracing blockchain technology represents a significant upgrade to China’s broader financial infrastructure, impacting both brokerage and banking systems.

Analysts pointed out that recent moves by Hong Kong and U.S. regulators to accelerate digital currency rulemaking reflect a deeper competition among sovereign nations — particularly China and the U.S. — over control of monetary pricing power and cross-border payment infrastructure.

To support RMB internationalization, China is reportedly starting with a stablecoin pilot in Hong Kong, with plans to eventually promote RMB-linked stablecoins.

Given stablecoins’ advantages in cost efficiency and speed of cross-border payments, banks entering the space could significantly enhance the competitiveness of the financial sector.