31st May 2023 – (Hong Kong) Hong Kong and the United Arab Emirates (UAE) central banks are planning to collaborate on cryptocurrency regulations and financial technology development. The Hong Kong Monetary Authority (HKMA) announced yesterday that it had met with its counterparts at the Central Bank of the United Arab Emirates (CBUAE) to discuss strengthening cooperation on virtual asset regulations and developments. The two central banks have also pledged to facilitate discussions on joint fintech development initiatives and knowledge-sharing efforts.
The CBUAE Governor, H.E. Khaled Mohamed Balama, has said he anticipates a long-term relationship with the HKMA, while the HKMA Chief Executive, Eddie Yue, has said the relationship will benefit both jurisdictions economically as they share many complementary strengths and mutual interests. Following the meeting, the two central banks held a seminar for senior executives from banks in Hong Kong and the UAE.
The collaboration comes as the Hong Kong Securities and Futures Commission (SFC) is allowing virtual asset service providers (VASPs) to cater to retail investors in Hong Kong starting 1st June. Several cryptocurrency exchanges, including CoinEx, Huobi, and OKX, have filed applications to have dedicated Hong Kong crypto trading services since the SFC announced the application process.
Hong Kong’s treasury chief, Christopher Hui, has also spoken in favour of cryptocurrencies, asserting that the city has allowed retail investors to trade them under its new regulatory regime because “virtual assets are going to stay.” Hui claimed that the benefits of utilising cryptocurrencies outweighed the potential risks involved. He noted the importance of regulation, stating that for the positive elements of virtual assets to be harnessed, these activities have to be allowed in a regulated way.
Financial infrastructure and financial market connectivity between the two jurisdictions were also discussed as key points of collaboration. The seminar covered various topics, including how cross-border trade settlement can be improved and exploring how UAE corporations can leverage Hong Kong’s financial infrastructure platforms to gain access to Asian and mainland markets.
The collaboration between the HKMA and CBUAE is a positive development for the cryptocurrency industry, as it signals a willingness by regulators to work together in creating a more harmonised regulatory environment. This is particularly important given the global nature of cryptocurrencies, which transcend national borders.