A new era for Hong Kong’s virtual asset market: the rise of licensed exchanges

In the field of virtual asset trading in Hong Kong, licensed exchanges represented by OSL have become the core pillar of the market. With the end of the transition period of the licensing system for virtual asset trading platforms in Hong Kong on June 1, there are only two compliant licensed digital asset trading platforms, one of which is OSL. This marks that the virtual asset market in Hong Kong has entered a new stage of development.

Active entry of traditional financial institutions

In the past two months, local traditional brokerage firms in Hong Kong have been involved in the field of virtual asset trading. At the same time, more and more investors, financial institutions, listed companies and family offices have begun to seriously consider allocating virtual assets through Hong Kong's compliant channels. Behind this trend, whether it is a brokerage firm that has or is about to open virtual asset trading services, or a financial institution, listed company and family office that is accelerating its layout, to achieve the "last mile" of business, it is inseparable from the trading, custody and security services provided by licensed exchanges.

Advantages of the "broker + exchange" model

    At present, Hong Kong retail brokers mainly adopt the "broker + exchange" two-tier operation model to provide virtual asset trading services. Specifically, the broker first opens an omnibus account in a licensed exchange, and then executes virtual asset transactions for the customer in the account according to the customer's instructions.

    OSL Group CFO Hu Zhenbang believes that the "broker + exchange" two-tier operation model formed under Hong Kong's virtual asset regulatory system is not only at the forefront of the world in terms of virtual asset compliance transactions, but also opens up a feasible path for the "large-scale adoption" of virtual assets in traditional finance. This is mainly reflected in the following two aspects:

First, securities firms can directly reach tens of millions of existing investors by leveraging their huge customer base and mature service system accumulated in the traditional financial field, effectively promoting the emerging investment field of virtual assets.

Second, licensed exchanges such as OSL are responsible for key links such as virtual asset custody, transaction matching and settlement at the back end, and provide protection for investors' asset security through safety measures and professional technical teams that meet regulatory requirements.

This "professionalism + security" division of labor and cooperation model fully utilizes the advantages of securities firms in customer service and market promotion, while relying on the expertise of licensed institutions in compliance, technology and risk control, forming complementary advantages and jointly building a safe and reliable virtual asset trading ecosystem.

The key role of licensed exchanges

With the development of the global virtual asset market, especially the change in the attitude of the US political circles and the approval of Bitcoin and Ethereum ETFs, listed companies, family offices and even traditional financial institutions such as banks and fund companies have begun to actively study and deploy virtual asset businesses. Under this trend, the importance of licensed exchanges has become increasingly prominent and has become the "lifeline" of various businesses in the Hong Kong virtual asset market.

OSL Group CFO Hu Zhenbang revealed that since June 1, the business volume of Hong Kong's compliant licensed exchanges has increased significantly, including some listed companies and fund companies in the traditional financial field that have begun to allocate virtual assets through licensed exchanges to meet compliance and audit requirements.

Whether it is to include the six virtual asset ETFs launched on April 30 into the investment portfolio, or to directly trade and custody virtual assets such as Bitcoin and Ethereum, it is inseparable from the support and operation of licensed exchanges represented by OSL.

Looking to the future

With the continuous expansion of the scale of virtual asset ETFs in Hong Kong, more traditional brokerages providing virtual asset trading services, and financial institutions and family offices accelerating the pace of virtual asset allocation, licensed exchanges will continue to lead the Hong Kong virtual asset market into a new stage of greater maturity and prosperity, and make unique contributions to the development of the global virtual asset industry.

For licensed exchanges, this is just the beginning of a "historic moment". The future has come, and a new era of Hong Kong's virtual asset market is slowly unfolding.