Beijing-based Tiger Brokers and Shenzhen-based Futu are planning to add digital assets trading into their portfolios. The service is available for offshore clients aimed at the growing pool of young traders outside mainland China.
The new business plan was shared during the first-quarter earning calls amid Beijing cracking down on Bitcoin and other cryptocurrencies. China has banned onshore trading and mining of crypto, citing financial and environmental risks.
Opinion On Crypto Currently Divided
Cryptocurrencies went through extreme price volatility in May. Beijing’s decision on cryptocurrency trading and mining affected the value of Bitcoin, with the top crypto facing a 40% drop in its value.
Opinion in Wall Street was divided as well: While Goldman Sachs set up a dedicated trading desk and JP Morgan Chase is offering a Bitcoin fund for its wealthy clients, Bank Of America decided to stay as far away from crypto as possible.
The top management at Futu and Tiger Brokers decided to open up crypto services during this time. The key point being the trading services will be targeting customers not based in China, where the crackdown has caused grief to crypto traders.
Tiger Brokers Offers Crypto Trading For Offshore Clients
Tiger currently provides trading services for stocks listed on the US, Hong Kong, Australia, and Singapore stock exchanges. It has 376,000 customers with ready-to-trade deposits. Wu Tianhua, CEO of Tiger Brokers, claims,
“We notice cryptocurrencies such as bitcoin have become more acceptable by mainstream investors since last year and are emerging as an asset class. Tiger’s mission is to make investing more efficient and enjoyable for investors.”
Tiger Brokers, backed by smartphone giant Xiaomi, will not be offering its services to Chinese nationals as per their statement. It is currently in the process of applying for relevant licenses needed for crypto trading and has not specified who these regulators are.
Futu Diversifies To Digital Asset Trading
Futu, backed by Tencent, has stated that it will expand into digital currency trading in the second half of this year. Robin Li Xu, senior vice president, noted that the company is applying for licenses related to digital currency in the US, Singapore, and Hong Kong.
Futu’s chairman, Leaf Li Hua, envisions the company to grow into “China’s Charles Schwab.” Founded in 2012, the online brokerage has 790,000 paying customers, and its first-quarter net profit increased to US $149.5 Million.
Futu has diversified extensively since its inception, focusing on finding new avenues of business in recent years, stepping beyond stock trading and initial public offerings. It has a license to sell retirement schemes to its customers from the regulator of Hong Kong’s Mandatory Provident Fund. Futu needs to obtain a virtual asset service provider license from the city’s securities regulator to add crypto trading.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
Credit: Source link
