New policies on Financial Openness 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 Systematic Openness in the Financial Sector through Conditional Pilot Free Trade Zones (Ports) to Connect with International High Standards" (hereinafter referred to as "the Opinions"). This document proposed 20 policy measures, covering various aspects such as allowing foreign financial institutions to carry out new types of financial services, supporting cross-border purchases of overseas financial products, and facilitating the flow of funds for foreign investors, marking the arrival of a new wave of openness in the financial industry. These changes contain significant opportunities and potential benefits for participants in cross-border investment, Blockchain, and the cryptocurrency industry.

1. New Financial Service Pilot and Cross-Border Investment Opportunities

The new financial services mentioned in the "Opinions" refer to financial services that are already provided and regulated in other countries or regions but have not yet been conducted within our country. These services will be piloted in several free trade zones and free trade ports. It is particularly noteworthy that the "Cross-Border Wealth Management Connect" pilot in the Guangdong-Hong Kong-Macao Greater Bay Area will be further expanded, supporting mainland residents to purchase a wider variety of qualified investment products through financial institutions in Hong Kong and Macao.

The implementation of this policy may provide investors with more diversified cross-border investment options. For example, innovative financial products such as virtual asset ETFs in Hong Kong may be opened to mainland investors through the "Cross-Border Wealth Management Connect", enriching the choices in investment portfolios.

For institutions intending to participate in new financial services, the "Opinions" stipulate that financial management departments will make a decision on complete applications that meet legal form within 120 days. This provides a clear timeline and procedural guidance for foreign financial institutions intending to enter the Chinese market.

2. Facilitation of Cross-Border Capital Flow

The "Opinions" propose a series of measures to facilitate the cross-border flow of funds for foreign investors. Under the premise of genuine compliance, pilot areas will allow funds related to foreign investment to flow in and out freely and without delay. This includes various types of fund transfers such as capital contributions, profits, dividends, interest, capital gains, royalties, management fees, and technical guidance fees.

The implementation of this policy will significantly enhance the convenience of cross-border investment, making it easier to attract more foreign investors to participate in the Chinese market, while also providing greater flexibility for the international operations of Chinese enterprises. For the Blockchain and cryptocurrency industry, this may mean easier access to international capital support, promoting rapid development and innovation in the industry.

3. New Regulations on Cross-Border Flow of Financial Data

The "Opinion" also proposed measures to improve the arrangements for cross-border flow of financial data. Under the framework of the national data cross-border transmission security management system, efforts will be made to explore the formation of a unified compliance standard for the cross-border flow of financial data, clarify relevant rules, and allow financial institutions in pilot areas to legally transmit data required for daily operations to overseas.

This policy may bring significant benefits to real-world asset tokenization (RWA) projects. The core of RWA lies in converting real-world assets into digital tokens and deploying them on the Blockchain, a process that involves substantial data collection, storage, and transfer. The implementation of the new policy will help reduce data processing and compliance costs, improve operational efficiency, and provide more possibilities for the innovation and realization of RWA projects.

In the long run, RWA is expected to become one of the important ways for domestic enterprises to expand financing channels. The new policy not only allows for the free and immediate inflow and outflow of foreign exchange in pilot areas but also introduces a mechanism for cross-border data flow, which seems to create favorable conditions for the implementation of more RWA projects.

4. Outlook

With the gradual implementation of these policies, we can expect more legitimate and compliant financial institutions to launch mature innovative financial products. Institutions that can take the lead and introduce high-quality products are likely to gain higher visibility and capital inflows, creating a demonstration effect that will further attract more institutions and funds into this field.

Therefore, financial institutions and investors, especially participants in the blockchain and cryptocurrency space, should continuously pay attention to the implementation of various measures related to the "Opinions" by the People's Bank of China and relevant departments. This not only concerns their own business development but will also affect the future direction of the entire industry. With the gradual clarification and implementation of policies, we have reason to expect further openness and innovation in the Chinese financial market, bringing new vitality and opportunities to the global financial system.