China’s Robinhood rivals pile into the crypto craze as they look to compete overseas
- Two of China’s rivals to stock trading app Robinhood are looking to cryptocurrencies as a way to compete overseas.
- Futu and Tiger Brokers said this month they are applying for licenses in Singapore and the U.S. that will allow local customers to trade cryptocurrencies.
- The move comes as digital currency prices fall and Beijing increases its efforts to limit speculation in the market.
Omar Marques | SOPA Images | LightRocket | Getty Images
BEIJING — Two of China’s rivals to stock trading app Robinhood are looking to cryptocurrencies as a way to compete overseas.
The companies, Futu and Tiger Brokers, disclosed during earnings calls last month they are applying for licenses in Singapore and the U.S. that would allow local customers to trade digital currencies.
The move comes as cryptocurrencies such as bitcoin have climbed back into the spotlight in recent months, while Chinese regulators have increased their efforts to limit speculation in the market. In the last few weeks, authorities issued new warnings against digital currency trading and a crackdown on bitcoin mining — an energy-heavy computing process that allows participants to earn bitcoin.
But in the financial trading world, demand for cryptocurrencies is high as bitcoin’s price surged to record levels above $60,000, before dropping sharply to around $35,000.
Robinhood, which launched bitcoin and ethereum trading in the U.S. in early 2018, has added 3 million customers a month this year for its crypto business. In April, U.S.-based cryptocurrency trading site Coinbase debuted on the Nasdaq.
“We do hear a lot of interest from our users across the world in terms of crypto. We have listened to that,” Arthur Chen, Futu’s chief financial officer, told CNBC last week. He said the company hopes to offer cryptocurrency-related products as soon as the end of this year.
Both Futu and Tiger Brokers got their start primarily from Chinese employees of major tech companies like Alibaba and Baidu. Since these companies are listed in the U.S., that piqued their employees’ interest in trading stocks abroad.
However, both companies are increasingly focused on markets outside mainland China. In addition to essentially banning yuan-bitcoin transactions, Beijing tightly controls capital flows out of the mainland.
Futu has gained 100,000 paying clients in Singapore less than three months since launching there in early March, Chen said. He said about one-fourth of new paying clients in the first quarter came from Singapore and the U.S.