Several news items in the past two days, taken individually, are significant. On one hand, established cross-border internet brokerages like Tiger Brokers, Futu, and Changqiao are facing regulatory scrutiny and accountability; on the other hand, cryptocurrency exchanges like Binance are aggressively promoting stock trading, integrating US stocks, ETFs, stablecoins, and crypto assets into a single account system; and yet another hand, the State Council has released the "Regulations of the State Council on Outward Investment," further elevating the regulatory framework for China's outward investment management. These events appear to belong to different sectors: securities regulation, cryptocurrency exchange innovation, and administrative regulations on outward investment. However, when viewed together, they all point to the same thing: The demand for Chinese residents to allocate overseas assets is growing stronger, but legal, low-friction, and accessible channels for ordinary individuals to go global have not opened simultaneously. The demand will not disappear due to tightening regulations. It will simply shift its path. In the past, this path might have been overseas brokerages; now, it is likely to be stablecoins. The cleanup of old channels doesn't mean the impulse to buy overseas assets has disappeared. For over a decade, mainland Chinese residents have often used a familiar path to buy US and Hong Kong stocks: download an overseas brokerage app, submit identity information, open an account, deposit funds through an overseas account or other means, and then start buying stocks, funds, and options. This model worked not because it lacked regulatory risk, but because it was convenient and met the real needs of some users. Chinese investors do have a need for global asset allocation. Many aren't inherently inclined to break the law. They simply see Nvidia's stock price soaring, AI's soaring, and aerospace, energy, chips, and robotics constantly creating wealth stories, and then, looking back at their own assets, inevitably feel anxious. The problem is that the legal path is not smooth. For ordinary individuals, directly, freely, and at low cost exchanging RMB for USD to buy stocks in overseas markets is not a simple matter. The convenient foreign exchange purchase quota is not a free investment quota; the regulatory stance has always been clear: individuals cannot arbitrarily use foreign exchange purchases for overseas securities investment, real estate purchases, or other capital account purposes. Therefore, overseas online brokerages once met a significant portion of the demand. However, regulators are now re-examining this path. They are not only looking at where the platform is registered, where the servers are located, and where the transaction matching takes place, but also at more practical questions: Where are the customers? Where is the marketing? Where is the account opening guidance? Where is the customer service? Where do the trading orders come from? Where do the funds enter and leave? If an overseas platform consistently provides services to mainland Chinese users through Chinese-language pages, Chinese customer service, Chinese-language communities, KOLs (Key Opinion Leaders), and commission-based agency services, it's difficult for it to completely eliminate risk simply by stating "I am an overseas entity." Therefore, the investigations of Tiger Brokers, Futu, and Changqiao are not just about a few companies facing trouble. It's more like a signal: the gray-area cross-border securities service model of "personnel in China, platform overseas, business conducted through an app" is entering a period of cleanup. However, this doesn't mean the demand for buying overseas stocks will disappear. With the old channels cleared, the real question is: where will this demand go? Stablecoins are becoming a new intermediary layer for funds. The answer is likely stablecoins. Previously, buying US stocks involved at least several steps: bank currency exchange, overseas remittances, brokerage deposits, fund usage verification, and account review. Each step, while not necessarily a complete stop, served as a reminder that this was a cross-border financial transaction. Now, the path is changing. A person can first buy USDT or USDC with RMB, then transfer stablecoins to overseas exchanges, brokerages, or stock trading platforms, and then buy US stocks, ETFs, and even tokenized stocks, stock-linked certificates, and on-chain RWA products within the same app. Operationally, it becomes very much like a regular asset exchange. What the user sees is: I simply bought Nvidia with USDT.
What regulators see is a different picture: Are RMB funds leaving the country through virtual asset channels? Are they circumventing restrictions on foreign exchange usage? Are they participating in unlicensed overseas securities services? Have the profits been declared and taxed? Can the source and destination of the funds be explained?
This is the special position of stablecoins in this issue. It is not just a payment tool, nor simply a unit of account for crypto assets. It is becoming a funding intermediary layer for Chinese residents to allocate overseas assets. ... It is not just a payment tool, nor simply a unit of account for crypto assets. It is becoming a funding intermediary layer for Chinese residents to allocate overseas assets.
