The financial world witnessed a historic turning point on June 24, 2025, when Cathay Securities International quietly received an upgraded license from the Hong Kong Securities and Futures Commission (SFC). This landmark approval allows clients to trade cryptocurrencies and stablecoins directly on its platform — a move signaling Hong Kong’s bold step into regulated digital finance.
This regulatory breakthrough marks more than just a policy update; it represents a strategic pivot from观望 to structured innovation in China’s financial ecosystem. By formally recognizing stablecoin issuers under a legal framework, Hong Kong has ignited a chain reaction across capital markets — one that culminated in the explosive growth of the FinTech ETF (159851), which surged 116.17% over the past year, claiming the top spot among all index funds in mainland China.
Stablecoins: The Engine Behind the FinTech Surge
At the heart of this rally lies the rising prominence of stablecoins — digital assets pegged to traditional currencies or commodities to maintain price stability. While often viewed as a technological novelty, stablecoins are increasingly becoming instruments of macroeconomic strategy.
Globally, the stablecoin market now exceeds $253.8 billion in total market capitalization, with USDT and USDC dominating over 86% of the space. Yet, regulatory clarity has long been a bottleneck — until now.
Hong Kong’s introduction of a formal stablecoin regulatory framework has broken this deadlock, offering a model for how digital assets can be integrated into mainstream finance without compromising compliance or security. Analysts at Everbright Securities suggest this could serve as a "digital bridge" for RMB internationalization — potentially enabling offshore RMB-backed stablecoins to circulate globally via blockchain networks.
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Why Stablecoins Matter Beyond Speculation
Stablecoins are not merely trading tools — they're redefining real-world financial infrastructure:
- Cross-border payments: Enable near-instant settlements at a fraction of traditional banking costs.
- Tokenized real-world assets (RWA): Facilitate fractional ownership and liquidity for commodities, real estate, and bonds.
- Decentralized finance (DeFi): Serve as the primary medium of exchange in lending, borrowing, and yield protocols.
With major tech players like JD.com and Ant International preparing to apply for stablecoin licenses, institutional adoption is accelerating. Circle, dubbed the “first stablecoin IPO,” skyrocketed 750% within just 12 trading days post-listing — underscoring strong market confidence in compliant digital dollar solutions.
In A-shares, related概念股 such as Four Seas Precision (up 210% in 2025) and Hengbao Co., Ltd. have doubled in value, driven by their exposure to blockchain and digital payment ecosystems.
How FinTech ETF (159851) Became the Market Leader
What sets the FinTech ETF (159851) apart is its concentrated exposure to high-growth segments within the digital finance universe. Notably:
- 23% allocation to stablecoin-related equities — the highest among all ETFs
- Tracks the CSI Fintech Thematic Index, covering AI-driven financial services, internet brokerage platforms, financial IT systems, Huawei HarmonyOS integration, and信创 (information technology innovation)
Top holdings include industry leaders such as:
- East Money Information
- TongHuaShun
- Hundsun Technologies
- Runhe Software
- Newland Payment
- LAKALA
These companies benefit from dual tailwinds: rising retail investment activity during bull markets and increased institutional spending on financial technology upgrades.
During the “9·24 rebound” rally in the previous year, the ETF gained 123% in just 32 sessions — showcasing its high beta to market sentiment and liquidity shifts.
The Macro Backdrop: From Savings to Risk Assets
A deeper force is reshaping China’s financial landscape: the great migration of household wealth.
As one-year deposit rates dipped below 1% in May 2025, investors began rethinking traditional savings models. According to CITIC Securities, China is entering the first half of a prolonged interest rate cut cycle — making passive income from bank deposits increasingly insufficient.
Currently, 80% of Chinese households’ property income comes from interest, compared to just 10% from dividends. In contrast, dividend income accounts for 55% of property income across 38 other major economies.
With over 160 trillion yuan in household deposits seeking higher returns, capital is flowing into equities, funds, and alternative assets — fueling a surge in A-share liquidity.
This shift aligns with Kinnful Futures’ analysis: A confluence of economic recovery, declining interest rates, and deposit reallocation is driving sustained inflows into equities. The Shanghai Composite has broken above 3,400 points, reflecting growing investor confidence.
For FinTech ETF (159851), this environment has been transformative:
- 7.14 billion yuan net inflow over the past 10 trading days (as of July 1, 2025)
- Average daily turnover of 7.51 billion yuan in June
- Total AUM reached 57.31 billion yuan, setting new records
Its superior liquidity and scale place it far ahead of peers in the same category.
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FAQs: Understanding the Rise of Digital Finance
Q: What makes stablecoins different from other cryptocurrencies?
A: Unlike volatile cryptocurrencies like Bitcoin or Ethereum, stablecoins are designed to maintain a stable value by being backed by reserves such as fiat currency (e.g., USD or RMB), commodities, or algorithmic mechanisms.
Q: Is investing in FinTech ETF (159851) safe?
A: All investments carry risk. While the ETF offers diversified exposure to leading fintech firms, it is subject to market volatility, regulatory changes, and tracking error. Investors should assess their risk tolerance and consult official fund documents before investing.
Q: How does Hong Kong’s stablecoin regulation affect mainland China?
A: As a financial gateway, Hong Kong’s regulatory innovations often influence mainland policy development. Its pilot program may pave the way for broader digital RMB integration and cross-border blockchain use cases.
Q: Can stablecoins help promote RMB internationalization?
A: Yes. Offshore RMB-backed stablecoins could enhance global acceptance by providing a transparent, fast, and low-cost settlement mechanism — especially in emerging markets with limited access to traditional banking channels.
Q: What role do internet brokers play in this trend?
A: Platforms like East Money and TongHuaShun act as gateways for retail investors. During market upswings, user engagement rises sharply, boosting brokerage revenues and advertising income — creating a powerful growth loop.
A New Era of Financial Evolution
The meteoric rise of FinTech ETF (159851) is not just about numbers — it reflects a fundamental transformation in how value is created, stored, and transferred.
History shows that those who thrive during technological inflection points are not necessarily the loudest voices, but those who recognize structural shifts early. Just as Rockefeller capitalized on energy transition and Bezos harnessed cloud computing, today’s opportunity lies in digital finance.
From AI-powered trading algorithms to blockchain-based payment rails, we are witnessing the convergence of technology and finance at an unprecedented scale.
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While risks remain — including regulatory uncertainty and market cyclicality — the trajectory is clear: finance is going digital, decentralized, and data-driven.
As central banks explore CBDCs, institutions adopt tokenized assets, and individuals embrace self-custody wallets, the line between traditional finance and Web3 continues to blur.
The ascent of FinTech ETF (159851) is not just a performance milestone — it's a signal that the future of money is being rewritten, one block at a time.
Disclaimer: The information provided is for educational purposes only and does not constitute investment advice. Past performance does not guarantee future results. Cryptocurrency and ETF investments involve risk. Please read fund prospectuses and consider your financial situation before making any decisions.