Chinese regulators shut down cross-border stock trading for domestic users.

Financial boundaries between countries may seem complex, but when it comes down to individual accounts, they often come down to just one button.

After June 12, 2026, mainland Chinese users of China’s largest brokerages, Futu and Tiger, will find that their U.S. brokerage accounts still retain their holdings and assets, and they can still sell and withdraw funds, but they will no longer be able to deposit, buy, or add to positions.

When capital begins to show a tendency to escape state control, regulatory tightening most often restricts individuals' freedom to choose and allocate assets.

This recent Chinese crackdown on U.S. stock trading by cross-border brokers recalls the crypto cleanup nearly a decade ago. Both actions comprehensively reduced financial exposure that had long negatively impacted domestic liquidity, while strictly defining the channels through which onshore users may trade assets.

For many Chinese households, this channel serves more than just an investment need. After wage growth slowed and property values in China declined sharply, allocating assets to high-quality global companies may be one of the few remaining pathways to transform household wealth over the next two decades. Now, even this path is beginning to narrow.

The Implementation Plan for Comprehensive Governance of Illegal Cross-Border Securities, Futures, and Fund Activities, jointly issued by China’s Securities Regulatory Commission and seven other departments, clearly states: Within two years, all illegal cross-border investment activities will be fully shut down; starting immediately, the opening of any new accounts and inflow of funds are prohibited, and existing funds are permitted to be fully withdrawn only within the two-year period. In addition, all supporting infrastructure and services related to cross-border investment—including online information exposure within China—are strictly prohibited, except for financial services.

Meanwhile, Futu and Tiger were each fined RMB 1.85 billion (USD 270 million) and RMB 410 million (USD 607 million), respectively, with their stock prices plunging as much as 45% and 30% in pre-market trading, marking the official end of the era in which Chinese mainland users freely traded U.S. stocks on the regulatory fringe.

In fact, this is not a single sudden event; in recent years, China has been gradually tightening the previously legal channels for RMB outbound investments, starting with addressing and rectifying securities firms:

• November 2021: The China Securities Regulatory Commission held a meeting with senior executives of Futu and Tiger Brokers.
• December 2022: Two companies were classified as operating illegally, and the opening of new mainland accounts was prohibited.
• May 2023: The app was removed from app stores in mainland China
• May 2026: Official investigation launched + joint rectification by eight departments

To maintain autonomy over the RMB exchange rate and monetary policy, capital controls have long been China’s strategic framework to counter U.S. dollar dominance, with restrictions on cross-border investment being just one component. The Beijing authorities have a clear objective: money earned within China should be reinvested in the domestic economy and not allowed to flow overseas indefinitely.

Any financial activity that contradicts national strategy, even if it involves top domestic innovative companies, is always secondary in Beijing’s priorities to financial stability and the strength of the onshore currency.

• Complete ban on cryptocurrency: Forced Chinese miners, who possess advanced data center design and energy integration capabilities, to move overseas; forced the world’s largest cryptocurrency to move overseas.
• Interference in ByteDance’s TikTok sale in the U.S.: Forced to divest its most valuable asset and indefinitely postpone the parent company’s IPO.
• Rejected Manus acquisition: Manus is forced to seek support from domestic Chinese capital and explore the possibility of a Hong Kong stock exchange listing.

Strict regulation not only restricts the flow of capital but also prevents the outflow of critical resources such as technology, talent, data, and supply chains. By keeping these core elements within the country and supporting domestic enterprises with local capital, the nation can enhance its competitiveness at the foundational level.

In the previous wave of globalization, China could stand out by relying on its manufacturing supply chain; but in the AI era, China faces not just OpenAI and Anthropic, but also tech giants like Nvidia, Microsoft, Amazon, and Alphabet—companies that have weathered the dot-com bubble. These firms possess decades of technological expertise and are backed by America’s vast capital markets, giving them financing and financial leverage capabilities that may be orders of magnitude greater than those of Chinese companies. Therefore, keeping liquidity and private capital within the country and concentrating resources to support domestic tech enterprises is currently China’s top priority.

Strong financial regulatory reforms, combined with a series of supportive measures for Hong Kong’s stock market and China’s Sci-Tech Innovation Board, have strategically encouraged enterprises with core technologies and data-sensitive operations to prioritize listing on the A-share or Hong Kong markets rather than issuing ADRs in the U.S. This has led Chinese entrepreneurs to align with Beijing’s strategic shift toward “the East rising, the West declining” in capital allocation: In 2025, total IPO proceeds in Hong Kong reached approximately HK$285 billion ($36 billion), topping the global ranking for the first time since 2019, far surpassing Nasdaq’s $27.5 billion. The proportion of companies listing on both the A-share and Hong Kong markets has also been steadily rising, reaching nearly 60% by the first half of this year.

Press Enter or click to view the image in full size.

The Hong Kong Exchange is being positioned as the central hub for Chinese companies to attract global liquidity, while maintaining strict control over governance in China's hands.

Therefore, this comprehensive withdrawal of U.S. stock brokers is not merely about preventing domestic capital from continuing to provide a valuation premium to the U.S. capital markets. Given that China has already missed the early opportunity in the AI industry, the strategic significance behind this move may far outweigh that of all previous capital controls.

According to the MSCI World Index factsheet as of June 30, 2026, the top ten constituents collectively account for 25.74% of the index’s weight, almost entirely comprising U.S. technology and AI-related companies. These firms control ownership of future cash flows generated by AI computing power, cloud platforms, semiconductors, advertising networks, operating systems, consumer access points, electric vehicles, and satellite internet. The global distribution system for productive assets is concentrated in the hands of a few companies. This extreme concentration creates a “siphoning effect” on global passive capital. Since passive index funds allocate strictly according to market capitalization weightings, for every $100 of new global liquidity—such as from pension fund dollar-cost averaging or sovereign wealth fund allocations—nearly $26 flows mechanically into these ten U.S. tech companies. This further inflates their valuation premiums, granting them near-endless, low-cost financing advantages in the real world to acquire, innovate, and ultimately lock in control over core digital and physical assets of the future.

Join Medium for free to receive updates from this author.

Remember me for faster sign-in

When these companies capture a quarter of global economic growth, ordinary Chinese citizens have no simple way to access this most obvious market beta.

Press Enter or click to view the image in full size.

The industry distribution of China’s A-share market, however, presents a completely different picture. Historically, the financials sector has dominated the CSI 300, consistently accounting for 20% to 30% of its weight. However, between late 2025 and early 2026, the information technology sector surpassed financials for the first time in history, becoming the largest-weighted industry in the A-share market.

Press Enter or click to view the image in full size.

Over the past two decades, China’s economic growth engine was “real estate plus infrastructure,” requiring massive credit expansion. Banks and non-bank financial institutions became the largest centers of cash flow, dominating the index. However, in recent years, the macro structure has undergone fundamental changes, strongly reflecting the resonance of China’s unique national strategic will and structural liquidity guidance:

1. Shift in the credit cycle: With tighter controls on local government debt and real estate leverage, the pace of balance sheet expansion in traditional financial sectors has significantly slowed, leading to a downward adjustment in valuation benchmarks.
2. Central Bank Structural Liquidity: Over the past year, a significant amount of targeted monetary policy tools—such as re-lending programs for technological innovation—have been precisely deployed. Liquidity has been directly channeled into hard tech, domestic semiconductor substitution, and advanced manufacturing sectors.
3. Capital pricing of "new-quality productive forces": Capital markets are revaluing companies aligned with "autonomous control" and "technological self-reliance." Firms in fields such as computing infrastructure, semiconductor equipment, and advanced materials are receiving significant valuation premiums and capital allocation.

This lag is evident not only in the structural composition of the index but also in stock market performance. Since the launch of ChatGPT in 2022, China, as the world’s second-largest economy, has seen the weakest stock market gains among the top five global economies. Chinese retail investors can only watch helplessly from the sidelines, constrained by limited investment capital, as they are excluded from the new wealth system.

Press Enter or click to view the image in full size.

Cross-border investment demand within China is not merely about "adoring foreign things"; it stems from lackluster performance by domestic tech companies, a sharp decline in real estate, and a growing sense of relative deprivation that has pushed retail investors' anxiety to its peak. This year, ETFs tracking overseas markets have even seen premiums as high as 10% in the A-share market.

Press Enter or click to view the image in full size.

From a national perspective, capital controls can prevent domestic liquidity from bolstering foreign companies, instead supporting the growth of "domestic enterprises," avoiding AI supply chains being monopolized by foreign entities, and retaining control over asset pricing. However, for individual investors, the country of origin of high-quality productive assets is irrelevant—they care only about whether they can purchase these assets.

When the interests of nations and individuals diverge, this gap creates a new opportunity for crypto.

Over the past 15 years, the core narrative of crypto has been banked the unbanked: enabling those without bank accounts to access payments, savings, lending, and advanced monetary systems. This narrative remains vital, but the next frontier is helping these unbanked individuals gain access to the global distribution system for core assets.

Over the past year, the market capitalization of tokenized stocks has grown by over $1.3 billion. In June 2026, SpaceX drove the monthly trading volume of tokenized stocks past $3.4 billion; on trade.xyz, daily trading volume for RWA perpetual contracts exceeded $6 billion.

Press Enter or click to view the image in full size.

Press Enter or click to view the image in full size.

Even though this scale still pales in comparison to the traditional U.S. stock market, it is sufficient to demonstrate that tokenized assets are beginning to exhibit robust on-chain liquidity, accessible to global users, tradable 24/7, and continuously priced even after traditional markets close.

Over time, these tokenized assets may also be collateralized, lent, and combined into new asset structures, evolving into an alternative distribution layer that provides a new brokerage system for those excluded by traditional finance.

Today, it’s Chinese retail investors being locked out; tomorrow, it could be Latin American users without U.S. brokerage accounts, Asian users lacking accredited investor status, Middle Eastern users restricted by their country’s capital controls, or simply a young person who doesn’t want their assets defined by their local financial system. So the next big opportunity in crypto may not be building a faster wallet or a cheaper exchange—but creating new asset entry points to repackage, price, and distribute global productive assets.

In the AI era, brokered the unbroked is bidirectional.

The same applies to corporations: those that can secure future capital investments, scarce physical resources, and market attention on a global scale in advance are more likely to build a moat ahead of their competitors. U.S. corporations have long enjoyed privileged status as first-class issuers of assets, with preferential access to financing worldwide.

Major U.S. tech companies possess balance sheets and credit ratings superior to those of many sovereign nations. They are leveraging this privilege to act as “macro hedge funds.” When the Bank of Japan (BOJ) or other central banks maintain prolonged periods of relatively loose monetary policy, creating high dollar funding costs, these companies engage in corporate-level carry trades, locking in borrowing costs at extremely low levels of 1% or even lower. The lending institutions providing the capital are typically local pension funds, insurance companies, and other institutional investors. Global savings from other countries are directly supplying America’s tech giants with the cheapest possible fuel for expansion.

Since last year, major U.S. cloud providers have issued large amounts of foreign currency bonds. In 2026 alone, Alphabet issued ¥576.5 billion (USD 3.6 billion) in Japan and CHF 3.055 billion (USD 3.9 billion) in Europe; Amazon also completed a CHF 2.82 billion (USD 3.6 billion) bond offering. In just two years, these companies' foreign debt ratios have grown from zero to 30%.

However, the supply chain structure of AI is creating many new non-U.S. dollar assets, and the exclusive privilege of U.S. companies to issue such assets may not last much longer.

The importance of South Korea and Taiwan's semiconductor industries in the global supply chain, along with China’s recent IPO of CXMT, which received 500 times oversubscription, highlights their roles in the AI supply chain—yet many high-quality companies remain excluded from dollar-denominated capital markets. This is precisely why CXMT launched early on Hyperliquid: to gain access to global liquidity.

Press Enter or click to view the image in full size.

The gap between China and the U.S. in the AI race may be smaller than we think. From DeepSeek, launched in February last year, to the impressive Kimi K3 released just days ago, it’s clear that China is rapidly closing the gap with the U.S.—not to mention its far-leading industrialization in humanoid robotics. While the world’s attention is currently focused on American big tech and the upcoming IPOs of OpenAI and Anthropic, when DeepSeek and Moonshot eventually list on China’s A-share market, it may be American investors who end up regretting their missed opportunities.

Demand for assets is becoming increasingly global, but ownership and issuance rights are still constrained by national borders.

This is why "brokered the unbrokered" will be more important than "banked the unbanked" over the next 15 years: the former addresses how an individual gains access to a stable monetary system, while the latter determines who has the right to future low-cost financing and ownership of advanced productivity.

In 1914, Ford introduced the eight-hour day, five-day workweek, and for the past century, modern society has revolved almost entirely around the institutionalization of work and the work ethic. Who you are is often defined by what you do for a living.

Today, a century later, the fourth industrial revolution, driven by AI, continues to erode the marginal value of mental labor. For the vast majority of knowledge workers, wage growth will increasingly struggle to keep pace with asset prices and monetary expansion—especially for assets that capture technological, monetary, and monopolistic gains. The power to allocate assets has long ceased to be merely a traditional "financial planning" issue; it has become a new mechanism of social stratification.

The essence of finance is "selling hope." May hope always endure.