A subsidiary of China Merchants Bank (CMB), a leading financial institution in China, named CMB International Securities Limited, has officially launched a cryptocurrency trading platform in Hong Kong.
As announced via CMB’s WeChat account on Monday, the company has initiated its virtual asset trading services. This launch is a direct result of the Hong Kong Securities and Futures Commission granting the bank a virtual asset service provider license in mid-July.
CMB’s new crypto exchange, based in Hong Kong, provides round-the-clock trading capabilities for Bitcoin (BTC), Ether (ETH), and Tether’s USDt (USDT). However, according to documents released by the bank, only professional investors are eligible to utilize these crypto trading services.
China Merchants Bank stands as one of China’s largest banks, boasting over $1.7 trillion in assets under management as of March’s end, based on data from Macrotrends. Its class A shares also maintain a significant market capitalization of $153.16 billion.
Crypto Ban Remains in Mainland China
CMB highlights that it is the first brokerage firm associated with a Chinese bank in Hong Kong to have secured licenses related to virtual asset trading services. Furthermore, the bank expressed its intent to enhance integration between traditional stock trading, digital assets, and financial technology applications.
Despite this development, such services remain illegal in Shenzhen, China, where CMB’s headquarters are situated. The Chinese government’s prohibition of crypto trading, initiated in 2017, triggered substantial market sell-offs at the time.
Since the initial ban, Chinese authorities have consistently maintained that crypto trading is illegal within mainland China, prompting market participants to explore alternative solutions. However, Hong Kong operates under its own set of regulations within China’s “one country, two systems” framework and is becoming a growing hub for crypto innovation.
Hong Kong as a Growing Crypto Center
Hong Kong’s authorities seem to be prioritizing crypto regulation. Earlier this month, on the 1st, the Hong Kong Monetary Authority (HKMA) finalized its regulatory structure for stablecoin issuers.
Following the implementation of these rules, stablecoin businesses based in Hong Kong experienced double-digit losses on August 1st. Analysts described this decline as a healthy market correction, pointing out that the requirements for stablecoin issuers were stricter than initially anticipated.
These regulations will be phased in over a six-month transition period beginning August 1st. The new Stablecoin Ordinance effectively makes it a criminal offense to offer or promote unlicensed fiat-referenced stablecoins to retail investors. Local authorities also established a public license registry before these regulations took effect.
The Hong Kong Securities and Futures Commission has cautioned that the newly introduced local stablecoin regulatory framework has amplified the potential for fraud. Furthermore, last week, the SFC released immediate guidance concerning cryptocurrency custody standards, implementing extensive security requirements and a ban on smart contracts in cold wallet setups – a regulation that clashes with the practices of several prominent companies.