Hong Kong and UAE central banks collaborate on crypto guidelines and fintech development

By: Michael Wilson

Hong Kong and UAE central banks collaborate on crypto guidelines and fintech development

May 31, 2023 6:39 AM

The two central banks intend to unify their financial service sectors, claiming that they have "many complementary strengths."


The central banks of Hong Kong and the United Arab Emirates (UAE) are aiming to work on cryptocurrency laws and financial technology development.


The Hong Kong Monetary Authority (HKMA) said→ on May 30 that it had met with its colleagues at the Central Bank of the United Arab Emirates (CBUAE) and that the two institutions had agreed to "strengthen cooperation" on "virtual asset regulations and developments."


The two central banks also agreed to promote discussions about "joint fintech development initiatives and knowledge-sharing efforts" with each region's respective innovation centers.


Key themes considered included financial infrastructure and financial market linkages between the two jurisdictions.


H.E. Khaled Mohamed Balama, governor of CBUAE, stated that the partnership with the HKMA will be ongoing and long-term.

 

Eddie Yue, chief executive of the Hong Kong Monetary Authority (HKMA), and H.E. Khaled Mohamed Balama, governor of the Central Bank of the United Arab Emirates (CBUAE), are photographed with Hong Kong and UAE bank officials. Source: HKMA


The alliance will assist both jurisdictions economically, according to HKMA CEO Eddie Yue, because they have "many complementary strengths and mutual interests."


After their meeting, the central banks of Hong Kong and the United Arab Emirates hosted a lecture for the top banking officials in both jurisdictions.


It covered a variety of themes, including how to improve cross-border trade resolution and how UAE firms might use Hong Kong's financial infrastructure platforms to obtain access to Asian and mainland markets.

 

At a meeting on May 29, CBUAE governor H.E. Khaled Mohamed Balama (left) is pictured with HKMA chief executive Eddie Yue (right). Source: HKMA


The agreement comes as the Securities and Futures Commission (SFC) of Hong Kong allows virtual asset service providers (VASPs) to serve retail investors in Hong Kong beginning June 1. 


The HKMA's treasury chief believes cryptocurrency is here to stay.


Meanwhile, Hong Kong's Treasury Chief Christopher Hui told→ AFP on May 30 that the city has permitted ordinary investors to trade cryptocurrency under its new regulatory regime because "virtual assets are here to stay."


Hui said that the advantages of using bitcoins exceeded the hazards.


"Regardless of the potential risks involved, (virtual assets) also carry fundamental value," he stated, emphasizing the significance of regulation:


"In order to harness these positive elements, these activities must be permitted in a controlled manner."


Since the SFC announced the application process, many cryptocurrency exchanges, including CoinEx, Huobi, and OKX, have filed applications for specialized Hong Kong crypto trading services.