The Central Bank of the United Arab Emirates (CBUAE) and the Hong Kong Monetary Authority (HKMA) have announced a move to strengthen policy collaboration on financial services, including digital assets. The announcement was revealed during a bilateral meeting in Abu Dhabi earlier this week.
According to a statement issued by the HKMA, the two sides discussed a number of initiatives and agreed to cooperate in three areas, including financial infrastructure, financial market connectivity between the two jurisdictions, and virtual asset regulations or digital assets.
The two partners will also look to connect their Fintech initiatives and knowledge sharing regarding innovative financial technology.
Senior executives from both the UAE and Hong Kong conducted a seminar on key opportunities to pursue between Hong Kong and the UAE.
The banks that participated in this seminar included First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Emirates NBD, Industrial and Commercial Bank of China, Bank of China, HSBC, and Standard Chartered, along with the Bank of China, Citi, HSBC, and Standard Chartered.
H.E. Khaled Mohamed Balama, Governor of the CBUAE, issued the following statement on the MOU:
“We are pleased to have welcomed the Hong Kong Monetary Authority and its delegation to the UAE as we look to build on our central banks’ existing and robust relations. During the day’s discussions, we explored deepening collaboration across several important areas including financial market infrastructure development and mutual opportunities for growth in digitisation and technological advancement.”
He added that they look forward to a longstanding agreement with Hong Kong, working on areas of mutual interest.
Eddie Yue, Chief Executive of the HKMA, said the two sides shared a lot of “complementary strengths and mutual interests.
“We look forward to continued collaboration with the CBUAE and to more exchange between the Hong Kong and the UAE financial sectors, and would welcome the UAE stakeholders’ visit to Hong Kong in the near future.”
Loredana Matei, CEO of Jensen Matthews PR, and Finsight News, shared his perspective on the announcement calling it a significant development in the global cryptocurrency ecosystem:
“Both jurisdictions, known for their openness to crypto, are now aiming to strengthen cooperation in regulating virtual assets. This collaboration extends beyond regulatory matters, as they also explore opportunities to facilitate cross-border trade and leverage Hong Kong’s financial infrastructure platforms to access Asian and mainland Chinese markets.”
Matei said that Hong Kong has been advancing on a supportive environment for crypto, lifting a ban on retail participation. Beginnning in June, approved digital asset firms will be able to provide services, attracting names like Huobi, Gate Group, OKX, and BitMEX.
“Hong Kong’s decision to open its doors to these crypto giants showcases its commitment to becoming a prominent hub for digital asset activities.
At the same time, Matei reflected on the UAE’s growing crypto ecosystem:
“The United Arab Emirates has also been fostering a thriving crypto ecosystem. In January, Dubai was already home to over 500 crypto startups, indicating a strong interest in the sector. To ensure investor protection and regulate crypto trades, the emirate launched the Virtual Assets Regulatory Authority (VARA) in March 2022. The recent announcement that the federal securities regulator is accepting applications from companies interested in providing crypto-related services further solidifies the UAE’s position as a crypto-friendly jurisdiction.”
Matei expects the partnership will result in better crypto regulation and a regulatory environment that supports investor protection while allowing it to evolve.
“The collaboration between the central banks of Hong Kong and the UAE represents a significant milestone in the global crypto landscape. With both jurisdictions positioning themselves as crypto-friendly, this partnership aims to strengthen cooperation in regulating virtual assets and facilitating cross-border trade. The initiatives taken by Hong Kong and the UAE demonstrate their commitment to embracing the opportunities presented by the by the cryptocurrency industry and fostering innovation in their respective financial ecosystems.”