In brief
- Popular digital wealth apps in China are looking to get involved in cryptocurrencies.
- Despite China's latest crackdown, the crypto sector remains as popular as ever.
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Publicly-listed Chinese brokerages Futu and Tiger Brokers are planning to expand into cryptocurrency trading on overseas markets such as the U.S. and Singapore, South China Morning Post reported today.
Both brokerages have been compared to Robinhood or Wealthfront in their offerings. Each service lets users buy and sell various securities, charging a small fee. Futu’s largest investor is the Chinese multinational tech firm Tencent.
Tiger Brokers’ CEO, Wu Tianhua, cited mainstream crypto adoption over the past year as a key reason behind the move. In an earnings call last week, he added that the company’s mission has been “to make investing more efficient and enjoyable for investors.”
W pointed out that the firm is “not going to offer such a service to Chinese nationals” and is currently applying for “relevant licenses” outside of mainland China that would allow it to offer cryptocurrency trading services.
Likewise, Futu plans to offer a crypto trading desk to its overseas clients in the second half of 2021. The senior vice president of Futu, Robin Li Xu, said that the firm is filing for cryptocurrency licenses in Singapore, Hong Kong, and the United States during a conference call in mid-May.
Futu and Tiger Brokers reported roughly 789,652 and 376,000 active customers with assets in their accounts, respectively. Both firms also plan to attract more new users via an in-app social network that allows people to exchange trading ideas and watch educational videos.
China cracks down on crypto
The companies’ focus on markets outside of mainland China is unsurprising amid the latest crackdown on digital assets from the local government.
Over the past couple of weeks, Chinese authorities have—for the umpteenth time—denounced crypto mining and trading, plunging the crypto market into disarray.
Several Chinese Bitcoin mining companies have since suspended their operations and are now looking to move their business outside China. In their turn, major Chinese crypto exchanges Huobi and OKEx halted pool mining and leveraged trading activities.
All the while, interest in cryptocurrencies is steadily growing across the world.
“We do hear a lot of interest from our users across the world in terms of crypto. We have listened to that,” Futu’s chief financial officer Arthur Chen told CNBC last week.