Chinese Stock Exchanges Take On Robinhood Offering Crypto Features To US Clients

Chinese stock exchanges Futu and Tiger Brokers are taking on the US trading platform Robinhood by offering a selection of cryptocurrencies to American traders.

What Happened: According to CNBC, the exchanges disclosed they were applying for the licenses necessary to facilitate the trading of cryptocurrencies in Singapore and the United States during earnings calls.

This may be a way to diversify Futu's and Tiger Brokers' income stream as Chinese authorities put increasing regulatory pressure on local crypto companies, with multiple local digital asset mining companies halting operations. 

“We do hear a lot of interest from our users across the world in terms of crypto. We have listened to that," Futu’s Chief Financial Officer Arthur Chen told the reporters.

Futu and Tiger Brokers were jumpstarted by the employees of Chinese behemoths such as local e-commerce giant Alibaba Group Holding Ltd. BABA and Chinese Google rival Baidu, Inc. BIDU.

Since then, the companies have expanded abroad; and Chen said that Futu has gained 100,000 paying clients in Singapore in under three months, adding that one-fourth of new paying clients in the first quarter of 2021 came from Singapore and the United States.

Why It Matters: Both Futu and Tiger Brokers hope to compete with Robinhood and traditional players, such as Interactive Brokers LLC IBKR with an in-app social network, where traders can interact with each other and consume educational material.

By the end of March, Futu reportedly had 789,652 asset-holding customers, a number that is more than three times higher than what the company reported a year before.

See also: Chinese Crypto Exchanges Continue To Suspend Services Amidst Regulatory Uncertainty

Tiger, on the other hand, saw the number of its asset-holding customers more than doubling in the first quarter compared to 376,000 customers last year.