The financial boundaries between nations may seem complex, but when it comes down to an individual's account, it's often just a single button.
After June 12, 2026, when mainland Chinese users of Futu and Tiger Brokers, China's largest brokers, opened their U.S. stock trading accounts, their holdings and assets were still there. They could still sell and withdraw funds, but they could no longer deposit funds, buy, or add to positions.
When capital begins to show signs of escaping national control, the first restrictions that regulatory tightening often imposes are on the space for individuals to choose and allocate their assets.
This cleanup of the U.S. stock business by cross-border brokers in China reminds one of the crypto crackdown nearly a decade ago. Both actions comprehensively tightened financial exposures that had a long-term negative impact on local liquidity within the country, strictly delineating the channels through which onshore users could trade assets.
For many Chinese families, this channel is not just about investment needs. With slowing wage growth and a significant contraction in Chinese real estate values, allocating to globally high-quality companies might be one of the few remaining avenues with the potential to change the trajectory of Chinese household wealth over the next two decades. Now, this path is also beginning to narrow.
China's Capital Great Wall
The "Comprehensive Rectification Plan for Illegal Cross-Border Securities, Futures, and Fund Business Activities" jointly issued by eight departments including the China Securities Regulatory Commission is clear: within two years, all illegal cross-border investment activities will be comprehensively shut down. Effective immediately, new account openings and fund inflows are prohibited. Only existing funds are allowed to be fully transferred out within two years. Furthermore, apart from financial services, all supporting facilities and services surrounding cross-border investment, including information exposure on domestic online platforms, are completely banned.
Meanwhile, Futu and Tiger were fined RMB 1.85 billion ($270 million) and RMB 410 million ($60.7 million) respectively. Their stock prices plunged up to 45% and 30% in pre-market trading, officially signaling the end of an era where mainland Chinese users could freely buy and sell U.S. stocks at the edge of regulation.
In fact, this is not an isolated, sudden event. China has been gradually tightening the channels for RMB outbound investment that were once legal, starting with warnings and then rectifying brokers:
- Nov 2021: CSRC summoned senior executives of Futu (FUTU) and Tiger (TIGR).
- Dec 2022: The two companies were deemed to be operating illegally, prohibited from opening new mainland accounts.
- May 2023: Apps removed from mainland app stores.
- May 2026: Formal investigation launched + joint rectification by eight departments.
To maintain the autonomy of the RMB exchange rate and monetary policy, capital controls have long been a strategic framework for China to counter dollar hegemony. Restrictions on cross-border investment are just one part of this. The goal of Beijing authorities is clear: money earned within China should be reinvested in the domestic economy and cannot flow outbound without limit.
When any financial activity conflicts with national strategy, even involving the most outstanding domestic innovative enterprises, Beijing's priority has always been financial stability and onshore monetary sovereignty above all else:
- Complete ban on cryptocurrency: Forced Chinese miners, holding advanced data center designs and energy integration capabilities, to move overseas; forced the world's largest crypto ecosystem to move overseas.
- Interference in ByteDance's U.S. TikTok sale: Forced ByteDance to divest its most valuable asset, indefinitely postponing the parent company's IPO plans.
- Veto of Manus acquisition: Forced Manus to seek support from domestic Chinese capital and explore possibilities for a Hong Kong listing.
Robust regulation is not only about restricting capital flows but also about preventing the outflow of critical resources like technology, talent, data, and supply chains. Keeping these core elements within the country and supporting domestic enterprises with domestic funds is the only way to enhance national competitiveness from the ground up.
In the last round of globalization, China could still rely on its manufacturing supply chain to stand out. But in the AI era, China is facing not just OpenAI and Anthropic, but also tech giants like Nvidia, Microsoft, Amazon, and Alphabet, which have weathered the dot-com bubble. They possess not only over a decade of technological accumulation but also the backing of the vast U.S. capital markets. Their capability in financing and leveraging financial leverage may differ from Chinese enterprises by more than two orders of magnitude. Therefore, retaining liquidity and private capital onshore, concentrating funds to support domestic tech enterprises, is China's current urgent priority.
The strong financial rectification efforts, combined with a series of support measures for the Hong Kong stock market and the A-share STAR Market, strategically encourage enterprises with core technologies and data sensitivity to prioritize listing on the A-share or Hong Kong markets rather than issuing ADRs in the U.S. This has led to Chinese entrepreneurs aligning their capital operations with Beijing's choice of "the East rising, the West declining": In 2025, Hong Kong's IPO volume reached approximately HKD 285 billion ($36 billion), topping the global charts again since 2019, far exceeding Nasdaq's second-place $27.5 billion. The proportion of companies dual-listed in both A-shares and Hong Kong shares continues to climb, reaching nearly 60% in the first half of this year.
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It is evident that the Hong Kong Exchange is being positioned as a center for Chinese enterprises to absorb global liquidity, while keeping governance rights firmly in Chinese hands.
Therefore, this comprehensive shutdown of U.S. stock brokers is not just about preventing domestic capital from continuously providing valuation premiums to the U.S. capital market. With China having already missed the early opportunity in the AI industry, the strategic significance behind this move may far surpass all previous capital control measures.
Anxious Chinese Retail Investors
According to the MSCI World Index factsheet as of end-June 2026, the top ten constituent stocks account for 25.74% of the index weight, almost entirely U.S. tech and AI-related companies. These companies hold ownership over the future cash flows from AI computing power, cloud platforms, chips, advertising networks, operating systems, consumer touchpoints, electric vehicles, and satellite internet—the distribution systems for global productive assets are concentrated in a few hands. This extreme concentration has led to a "siphon effect" for global passive funds. Because passive index funds strictly allocate according to market cap weighting, out of every $100 of new global liquidity (e.g., pension fund contributions, sovereign wealth fund allocations from various countries), nearly $26 mechanically flows into these 10 U.S. tech companies. This further pushes up their valuation premiums, granting them nearly endless, cheap financing advantages in the real world to acquire, research & develop, and ultimately lock in future core digital and physical assets.
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When a quarter of global economic growth is captured by these companies, ordinary Chinese citizens have no simple means to capture this most obvious epochal beta.
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China's A-share market presents a completely different industrial distribution. In the history of the CSI 300, the Financials sector has long held absolute dominance, with its weight often maintained between 20% to 30%. However, from late 2025 to early 2026, the Information Technology sector's weight historically surpassed that of Financials for the first time, officially becoming the largest industry by weight in the A-share market.
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Over the past two decades, China's economic growth engine has been "real estate + infrastructure," which required massive credit expansion. Banks and non-bank financial institutions became the largest cash flow centers, dominating the index. However, the macro structure has undergone fundamental changes in recent years, well-reflecting the resonance between the uniquely Chinese national strategic will and structural liquidity guidance:
- Shift in the Credit Cycle: With controls on local government debt and real estate leverage, the balance sheet expansion speed of traditional financial sectors has significantly slowed, and their valuation center has declined.
- Central Bank Structural Liquidity: Over the past year, a large number of structural monetary policy tools (like re-lending for technological innovation) have been precisely deployed. Liquidity has been directly and directionally injected into hard tech, semiconductor import substitution, and high-end manufacturing.
- Capital Pricing of "New Quality Productive Forces": The capital market is repricing for "autonomous and controllable" and "technological self-reliance and self-strengthening." Companies in areas like computing infrastructure, semiconductor equipment, and advanced materials have received extremely high valuation premiums and capital tilt.
This delayed reaction is reflected not only in the industrial structure's index weight but also in stock market performance. Since the launch of ChatGPT in 2022, China, as the world's second-largest economy, has ranked last in stock market gains among the top five economies. Chinese retail investors can only hold onto their limited investment quotas, watching themselves be excluded from the new wealth system.
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The demand for cross-border investment within China is not simply about so-called "worshiping foreign things." It stems from the mediocre performance of domestic Chinese tech companies, the sharp contraction in real estate values, and a sense of relative deprivation regarding wealth that has pushed retail investor anxiety to its peak. This year, ETFs tracking overseas markets have even seen premiums as high as 10% in the A-share market.
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From a national perspective, capital controls can prevent domestic liquidity from strengthening foreign enterprises, instead fostering the growth of "domestic enterprises," avoiding monopoly of the AI supply chain by foreign entities, and keeping asset pricing power in its own hands. But for individual investors, the nationality of high-quality productive assets is unimportant; they only care about whether they can buy these assets.
When national and individual demands diverge, this gap precisely creates a new development opportunity for crypto.
Brokering the Unbrokered
Over the past 15 years, crypto's main narrative has been "banked the unbanked": enabling people without bank accounts to access payments, savings, loans, and an advanced monetary system. This narrative remains important, but the next frontier opportunity is to further integrate these unbanked individuals into the distribution system of global core assets.
Over the past year, the market cap of tokenized stocks has grown by over $1.3 billion. In June 2026, driven by SpaceX, monthly trading volume for tokenized stocks broke $3.4 billion; daily trading volume for RWA perpetual contracts on trade.xyz even exceeded $6 billion.
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Even though this scale still has a significant gap compared to the traditional U.S. stock market, it is enough to prove that liquidity for tokenized assets on-chain has begun to become active. They can be accessed by global users, traded 24/7, and priced continuously after traditional markets close.
In time, these tokenized assets might also be collateralized, lent, or combined into new asset structures, just like native crypto assets today, growing into an alternative asset distribution layer, providing a new brokerage system for those excluded from traditional finance.
Today it's Chinese retail investors being shut out; tomorrow it could be Latin American users without U.S. brokerage accounts, Asian users without qualified investor status, Middle Eastern users restricted by their country's capital controls, or simply a young person who doesn't want their asset boundaries determined by the local financial system. So the next big opportunity in crypto might not be building a faster wallet or a cheaper exchange, but creating new asset gateways, repackaging, repricing, and redistributing global productive assets.
Capital Flows in the AI Era
In the AI era, "brokering the unbrokered" works both ways.
This also applies to enterprises. Those who can lock in future capital investment, scarce physical resources, and market attention on a global scale ahead of time are more likely to build moats ahead of their competitors. U.S. enterprises, as first-class citizens in asset issuance, have long enjoyed privileges when raising capital globally.
Large U.S. tech companies possess balance sheets and credit ratings more robust than many sovereign nations. They are leveraging this privilege to act as "macro hedge funds." When the Bank of Japan (BOJ) or other regional central banks maintain a relatively loose interest rate environment for an extended period while U.S. dollar funding costs are high, they engage in corporate-level carry trades, locking in borrowing costs at extremely low levels, sometimes 1% or even lower. The lenders are typically local institutional investors like pension funds and insurance companies. The national savings of other countries worldwide are directly providing the cheapest ammunition for the expansion of U.S. tech giants.
Starting last year, major U.S. cloud service providers issued large amounts of foreign currency bonds. In 2026 alone, Alphabet issued bonds worth JPY 576.5 billion ($3.6 billion) in Japan and CHF 3.055 billion ($3.9 billion) in Europe; Amazon also completed a CHF 2.82 billion ($3.6 billion) bond issuance. In just two years, the proportion of foreign debt for these enterprises grew from zero to 30%.
However, the AI supply chain structure is creating many emerging non-dollar assets, and the exclusive asset issuance privilege enjoyed by U.S. enterprises may not last much longer.
The importance of Korean and Taiwanese semiconductors in the global supply chain, along with China's recent ChangXin Memory Technologies IPO (which received 500x oversubscription), hold positions in the AI supply chain. Many high-quality enterprises are still excluded from the dollar-dominated capital markets. This is also why ChangXin listed on Hyperliquid in advance—primarily to access global liquidity.
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And the gap between China and the U.S. in the AI race might be smaller than we think. From DeepSeek launched in February last year to the recently impressive Kimi K3, one must acknowledge that China is quickly catching up to the U.S., not to mention its leading industrialization in the humanoid robotics field. While the world's attention is focused on U.S. big tech and the upcoming OpenAI and Anthropic IPOs, when DeepSeek and Moonshot list on the A-share market in the future, perhaps it will be U.S. investors who will regret missing out.
The demand side for assets is becoming increasingly globalized, yet asset ownership and issuance rights are still constrained by national borders.
This is why "brokering the unbrokered" will be more important than "banking the unbanked" over the next 15 years: the former solves how an individual accesses a robust monetary system; the latter determines who gets to have future low-cost financing rights and ownership of future advanced productive forces.
In 1914, Ford began implementing an eight-hour workday, five-day workweek. Almost everything about modern society over the past 100 years has revolved around the institutionalization of work and the work ethic. Who you are often equals what job you do.
A hundred years later, today, the Fourth Industrial Revolution driven by AI continues to compress the marginal value of intellectual labor. Wage growth for the vast majority of knowledge workers will find it increasingly difficult to keep up with asset prices and monetary expansion, especially for those assets that can carry technological dividends, monetary dividends, and monopoly dividends. The right to allocate assets has long ceased to be just a traditional "wealth management issue"; it is becoming a new mechanism for social stratification.
The essence of finance is "being in the business of hope." May hope remain.
