Two Chinese online brokerages have set out to enter the global crypto trading market. The platforms, Tiger Brokers and Futu, are planning to offer their services only outside the People’s Republic as Beijing is once again cracking down on bitcoin trading in the country.
Major Chinese Online Brokers Dive Into Crypto Trading
Beijing-based Tiger Brokers and Shenzhen-headquartered Futu, China’s leading online brokerages, have unveiled plans to start offering crypto trading services, the South China Morning Post reported on Tuesday. The Nasdaq-listed companies want to compete with established platforms such as Robinhood and Etoro for a share of the expanding global market.
The two companies will not accept clients from mainland China, however, as authorities in their home country have recently reiterated a ban on cryptocurrency trading. The Chinese government has been going after crypto exchanges and payment service providers while vowing to continue closely monitoring China’s huge crypto mining industry.
The brokers have announced their intentions to expand into digital currency trading during Q1 earnings calls, SCMP detailed. Young and mobile traders residing outside the People’s Republic of China will be their main target, according to the publication. This global market has been growing with rising cryptocurrency prices over the past few months. Tiger Brokers CEO Wu Tianhua has been quoted as saying during last week’s call:
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 and Futu to Target Offshore Crypto Traders
Tiger Brokers is “not going to offer such a service to Chinese nationals,” the company’s chief executive emphasized. The brokerage is currently applying for relevant crypto trading licenses, added Wu Tianhua, without revealing which regulators are expected to provide authorization for Tiger’s new business endeavor.
The brokerage, which is backed by the Chinese smartphone giant Xiaomi, has reported a net profit of $21.1 million from the first quarter of this year. The platform, which facilitates trading of shares listed on stock exchanges in the United States, Hong Kong, Australia, and Singapore, has received deposits from more than 375,000 customers.
Futu, which is supported by the Chinese technology conglomerate Tencent, is planning its expansion into cryptocurrency trading for the second half of the year. During the company’s earnings conference call on May 19, Senior Vice-President Robin Li Xu said Futu is applying for digital currency-related licenses in Singapore, Hong Kong and the U.S. The broker has 790,000 customers and has registered a six-fold increase in net profit when comparing Q1 2021 to Q1 2020, bringing in $149.5 million.
Do you think Tiger Brokers and Futu will be able to offer crypto trading services in China in the future? Let us know in the comments section below.