New policies in the financial sector have been introduced, bringing new opportunities for cross-border investment and the Blockchain industry.

On January 22, 2025, five departments jointly issued the "Opinions on Promoting Institutional Opening Up to High International Standards in Conditional Free Trade Pilot Zones (Ports) in the Financial Sector" (hereinafter referred to as "the Opinions"). The Opinions propose 20 policy measures involving foreign-funded financial institutions carrying out new financial services, cross-border purchases of overseas financial services, facilitation of fund transfers for foreign investors, and cross-border flow of financial data, among others. This marks the arrival of a new wave of openness in the financial industry, while also bringing potential opportunities for cross-border investment, Blockchain, and the cryptocurrency industry.

1. New Financial Services Pilot and "Cross-Border Wealth Management Connect" Expansion

New Financial Services Pilot Scope

The "Opinion" proposes to pilot new financial services in regions such as the Shanghai, Guangdong, Tianjin, Fujian, Beijing Free Trade Zones and Hainan Free Trade Port. New financial services refer to financial services that are not provided within our country but are offered and regulated in other countries or regions.

"Cross-Border Wealth Management Connect" Pilot Expansion

It is particularly noteworthy that the "Opinions" mention that the "Cross-Border Wealth Management Connect" pilot will continue to be optimized in the Guangdong-Hong Kong-Macao Greater Bay Area. This measure supports residents of the Greater Bay Area in mainland China to purchase qualified investment products through financial institutions in Hong Kong and Macao, and expands the range of participating institutions and qualified investment products.

This policy may provide opportunities for innovative financial products in Hong Kong, such as virtual asset ETFs, to be opened to mainland investors through the "Cross-Border Wealth Management Connect," thereby enriching the investment choices for mainland residents.

Apply for New Financial Services

The "Opinions" allow foreign financial institutions to carry out new financial services similar to those of domestic financial institutions in pilot areas. The financial management department will make a decision on qualified applications within 120 days according to the principle of consistency between domestic and foreign.

This policy is expected to promote the innovation of compliant products in the Blockchain field. Some mature virtual currency-related technologies and models from overseas may be introduced to the domestic market through pilot areas, providing investors with indirect investment opportunities. This compliant channel will inject new vitality into the Blockchain industry and promote its standardized development.

2. Facilitating Cross-Border Capital Flow

The "Opinions" propose that, under the premise of genuine compliance, pilot areas are allowed to freely remit and transfer all funds related to investments with foreign investors without delay. This includes various payments such as capital contributions, profits, dividends, interest, capital gains, royalties, management fees, and technical guidance fees.

This policy will significantly improve the current strict foreign exchange controls under the capital account, which is beneficial for enhancing the efficiency of corporate funds, reducing management costs, and providing greater operational space for cross-border investors.

III. Arrangements for Cross-Border Flow of Financial Data

The "Opinions" propose to facilitate and regulate the cross-border flow of financial institution data in pilot areas, exploring the formation of a unified compliance standard for the cross-border flow of financial data, clarifying relevant rules, and allowing financial institutions in pilot areas to legally transmit data necessary for daily operations to overseas.

This policy may bring significant benefits to real-world asset tokenization (RWA) projects. RWA involves a large amount of data collection, storage, and transfer. A proactive policy for cross-border data flow can not only support RWA projects in exploring implementation but also reduce the costs of data processing and compliance for all parties, improving operational efficiency. In the long run, RWA is expected to become one of the important ways for domestic enterprises to broaden their financing channels.

4. Outlook

The introduction of the new policy is just the first step. In the future, with the introduction of more pilot projects, it is expected that more legal and compliant financial institutions will launch mature financial products. Institutions that are the first to launch innovative products may gain higher visibility and capital inflow, creating a demonstration effect.

It is recommended that financial institutions and investors, especially participants in the blockchain and cryptocurrency sector, continuously pay attention to the implementation of various measures regarding the "Opinions" by the People's Bank of China and relevant departments, and seize the opportunities brought by the policies.