Huaxing Capital is shifting towards Web3 with a $100 million investment in BNB, marking a strategic move away from traditional internet businesses.

Huaxing Capital's $100M BNB Investment Signals Web3 Pivot

Hong Kong-listed Huaxing Capital (1911.HK) is strategically pivoting to Web3, allocating $100 million to BNB and partnering with YZi Labs, formerly Binance Labs. This move aims to diversify from traditional internet businesses amidst evolving regulatory landscapes.

The Event in Detail

In August 2025, Huaxing Capital formalized its foray into Web3 by signing a memorandum of cooperation with YZi Labs, committing $100 million to BNB. This investment positions Huaxing as the first Hong Kong-listed company to include BNB in its digital asset allocation. This decision follows the Hong Kong Legislative Council's passage of the "Stablecoin Regulation Bill" in May 2025 and the government's release of the "Digital Asset Development Policy Declaration 2.0".

Market Implications

This strategic allocation serves as an endorsement of BNB's utility and governance framework within the blockchain ecosystem. The collaboration focuses on a $100 million BNB allocation, exploration of SFC-compliant digital-asset funds with China Asset Management (Hong Kong), and the launch of an RWA fund targeting several hundred million dollars using BNB Chain infrastructure.

Business Strategy and Market Positioning

Huaxing Capital's strategic shift reflects a response to challenges in its traditional internet business, marked by a revenue decline of 8.36% and a net loss of 564 million yuan in 2022. This compares to a strong performance in 2021, with total revenue reaching 2.504 billion yuan and a net profit of 1.624 billion yuan. Xu Yanqing's "Huaxing 2.0" strategy diminishes reliance on traditional internet businesses, betting on hard technology, Web3, and digital finance. The firm aims to bridge Web2 and Web3, leveraging its expertise in investment banking services, asset management, and wealth management.

Ms. Yin Ching Hui, Chairperson of China Renaissance, stated that the collaboration represents a major step in the maturation and institutional adoption of digital assets, signaling a growing convergence between traditional finance and blockchain-based ecosystems.

Huaxing intends to empower the BNB ecosystem by developing fund-based products and promoting BNB's listing on compliant virtual asset exchanges in Hong Kong. With YZi Labs' assistance, it will establish an RWA fund to promote the application of BNB public chain in stablecoin and RWA scenarios for Hong Kong-listed companies.

Broader Context

Huaxing Capital's move into Web3 aligns with a growing trend among institutional investors to diversify into decentralized technologies. The firm's investment in Circle positions it to leverage its expertise in stablecoins and RWA tokens. However, this transition carries risks due to the volatility of crypto markets. The success of this transition remains uncertain, as the centralized network of relationships that underpinned Huaxing's success in Web2 may not translate directly to the decentralized world of Web3.

Amidst a global cryptocurrency market with a daily trading volume exceeding $50 billion, a significant percentage of retail investors face persistent losses due to cognitive gaps in trading. Platforms like Vtrading are emerging to address these gaps by integrating AI-driven tools.

The evolving regulatory landscape surrounding digital assets presents challenges for banks entering the crypto space, with fragmentation between federal and state authorities creating uncertainty. Despite growing demand for digital asset products, financial institutions are hesitant to dive in due to these regulatory complexities. By prioritizing risk management, security, and regulatory compliance, financial institutions can successfully integrate digital assets into their portfolios.

While Huaxing's move echoes strategies of companies like MicroStrategy, the market context and financial fundamentals differ significantly. Huaxing's approach focuses on ecosystem development and regulatory compliance, whereas MicroStrategy primarily focused on Bitcoin accumulation. This signals a more nuanced and strategic approach to digital asset adoption by traditional financial institutions.