The rise of digital currencies has opened a new frontier in global finance, and internet-based brokerage firms are racing to secure their place in this rapidly evolving landscape. With Bitcoin, Ethereum, and other cryptocurrencies gaining traction among retail and institutional investors alike, platforms are increasingly eyeing crypto trading not just as an innovative offering—but as a lucrative revenue stream driven by transaction fees.
As regulatory frameworks mature in key markets like the U.S. and Singapore, brokers are stepping up efforts to obtain licenses that allow them to legally serve local clients. This strategic pivot reflects a broader trend: the convergence of traditional financial services with blockchain-powered assets.
👉 Discover how leading platforms are positioning themselves in the next wave of financial innovation.
Brokers Expand into Cryptocurrency Markets
Recent reports indicate that two major Chinese-origin online brokers—Futu Holdings and Tiger Brokers—have initiated licensing applications in both the United States and Singapore to offer cryptocurrency trading services to local clients.
Tiger Brokers confirmed the news to International Financial News, stating: “We are currently applying for relevant licenses in countries such as the U.S. and Singapore, aiming to launch digital currency trading to meet diverse investment needs.” The company emphasized its commitment to compliance, noting that any future crypto offerings will strictly adhere to local regulations and be available exclusively to overseas users.
Futu Holdings also acknowledged its involvement but clarified that these initiatives fall under its overseas business entities and are solely targeted at non-mainland customers. In its Q1 earnings report, Futu revealed it added 273,000 asset-holding clients during the quarter, with over 70% based in Hong Kong, Singapore, and other international markets—highlighting a growing overseas footprint ripe for expansion into digital assets.
Why Transaction Fees Are Driving Interest
At the heart of broker interest lies a simple economic incentive: transaction fees. The more active the market, the higher the volume—and the greater the revenue from trading commissions.
This model is already proven at Coinbase, the largest U.S.-based cryptocurrency exchange. In Q1 2021, Coinbase reported approximately $1.8 billion in total revenue, with **85.8% coming directly from customer trading fees**. Subscription and custody services contributed another 3.5%, bringing the platform’s total user base to 56 million and assets under management to an estimated $223 billion—capturing about 11.3% of the global crypto market share.
Such figures underscore why brokers see crypto not just as a trend, but as a scalable business line. For firms like Robinhood, which launched Bitcoin and Ethereum trading in early 2018, the results have been explosive. Despite technical outages due to high volatility and demand in May 2021, Robinhood saw its monthly average of new crypto users jump to 3 million in early 2021, up from just 200,000 per month in 2020.
Even traditional financial giants are re-entering the space. Goldman Sachs, once a pioneer in crypto offerings before pausing due to regulatory uncertainty in 2017, is now restarting its cryptocurrency trading desk and plans to resume support for Bitcoin futures—a sign of renewed institutional confidence.
Core Opportunities and Challenges for Brokers
While opportunities abound, expanding into digital currencies presents several challenges—especially for brokers navigating cross-border operations.
Regulatory Compliance Across Jurisdictions
One of the biggest hurdles is multi-jurisdictional compliance. Each country has distinct rules governing digital assets—from licensing requirements to anti-money laundering (AML) protocols and tax reporting standards.
As Dr. Pan Helin, Executive Dean of the Digital Economy Institute at Zhongnan University of Economics and Law, pointed out:
“Cross-border regulation and compliance remain significant challenges for brokerage firms operating internationally.”
However, he also stressed that intermediaries like brokers aren’t betting on price movements—they earn through volume-based commissions. As long as operations comply with local laws, facilitating crypto trades for overseas clients is both reasonable and aligned with their core business model.
Strategic Diversification Amid Market Saturation
For Chinese-origin brokers specifically, this move represents more than just revenue diversification—it's a strategic response to domestic constraints. Mainland China maintains strict prohibitions on cryptocurrency trading and mining activities, banning financial institutions from providing related services.
With limited room to grow at home, expanding abroad into high-demand markets becomes a logical step. And while crypto is a key focus, experts suggest broader diversification across active global markets—not just digital assets—can help mitigate risk and reduce reliance on any single product line.
👉 Explore how global trading platforms are adapting to meet rising demand for digital assets.
Frequently Asked Questions (FAQ)
Q: Are Futu and Tiger Brokers offering crypto trading in China?
A: No. Both companies have made it clear that any cryptocurrency-related services are operated through their overseas entities and are only available to non-mainland customers.
Q: Why are brokers interested in crypto if they don’t speculate on prices?
A: Brokers profit from transaction volume via fees and commissions. Increased trading activity—regardless of asset type—directly boosts their revenue without requiring them to take market positions.
Q: Is cryptocurrency trading legal for brokers in the U.S. and Singapore?
A: Yes, but only with proper licensing. Both jurisdictions allow regulated firms to offer crypto services under specific frameworks like money transmitter licenses (U.S.) or Payment Services Act regulations (Singapore).
Q: What risks do brokers face when entering crypto markets?
A: Key risks include regulatory changes, cybersecurity threats, operational strain during high volatility periods, and reputational exposure if compliance lapses occur.
Q: How does this affect average investors?
A: Greater broker participation increases accessibility, improves platform reliability, and may lower fees over time—giving retail investors more trusted options for entering the crypto space.
Q: Will more Chinese brokers follow suit?
A: While no other major Chinese broker has announced similar plans yet, continued international expansion could inspire others to explore regulated digital asset offerings abroad.
The Road Ahead: Innovation Within Boundaries
The push by internet brokers into digital currency trading reflects a larger shift in finance—one where technology blurs the lines between traditional securities and decentralized assets.
For firms like Futu and Tiger Brokers, this isn’t about chasing hype; it’s about aligning with user demand in regions where regulation permits innovation. Their cautious, compliance-first approach sets a precedent for responsible growth.
Moreover, as financial liberalization continues in China and beyond, outbound strategies may become essential for survival in an increasingly competitive landscape. Diversifying into high-growth areas—be it U.S. equities, Asian ETFs, or digital tokens—can help brokers escape commoditization at home.
Conclusion
Digital currency is no longer a fringe experiment—it's a mainstream financial asset class drawing serious attention from established players. Internet brokers are uniquely positioned to bridge traditional investing with the crypto economy, leveraging their tech-first models and global client bases.
But success won’t come from bold claims alone. It will depend on regulatory diligence, operational resilience, and a clear understanding of investor needs across borders.
As the race intensifies, one thing is certain: the future of brokerage includes blockchain—and those who adapt early stand to gain the most.
Core Keywords: digital currency, cryptocurrency trading, internet brokers, transaction fees, regulatory compliance, overseas expansion, blockchain finance