Hong Kong, UAE Central Banks Collab to Forge Partnership

Hong Kong and the United Arab Emirates (UAE) central banks are interested in collaborating on the regulation of cryptocurrencies and the advancement of financial technology.

The Hong Kong Monetary Authority (HKMA) and the Central Bank of the United Arab Emirates (CBUAE) met on May 30. They agreed to “strengthen cooperation” regarding “virtual asset regulations and developments.”

Additionally, the two central banks agreed to facilitate discussions on “joint fintech development initiatives and knowledge-sharing efforts” with each region’s innovation hubs.

In addition, the financial infrastructure and financial market connectivity between the two jurisdictions were highlighted as critical points.

The governor of the CBUAE, H.E. Khaled Mohamed Balama, expects the relationship with the HKMA to be ongoing and long-lasting.

Eddie Yue, chief executive officer of the Hong Kong Monetary Authority, stated that the relationship will benefit both jurisdictions economically because they share “many complementary strengths and mutual interests.”

After the meeting, the two central banks hosted a seminar for senior executives from Hong Kong and the United Arab Emirates.

It covered various topics, including improving cross-border trade settlement and how UAE companies can leverage Hong Kong’s financial infrastructure platforms to gain access to Asian and mainland markets.

Beginning June 1, Hong Kong’s Securities and Futures Commission (SFC) will permit virtual asset service providers (VASPs) to provide services to retail investors in Hong Kong.

Christopher Hui, Hong Kong’s Treasury Chief, told the AFP on May 30 that the city has permitted retail investors to trade cryptocurrencies under its new regulatory framework because “virtual assets are here to stay.”

According to Hui, the advantages of utilizing cryptocurrencies outweigh the risks.

“Despite the potential risks involved, (virtual assets) also carry with them their fundamental value,” he said, emphasizing the significance of regulation:

“So for these positive elements to be harnessed, these activities have to be allowed in a regulated way.”

Several cryptocurrency exchanges, including CoinEx, Huobi, and OKX, have submitted applications for dedicated Hong Kong crypto trading services since the SFC announced the application process.