Hong Kong and UAE Central Banks Join Forces to Develop Unified Crypto Regulations
The central banks of Hong Kong and the United Arab Emirates (UAE) have announced plans to strengthen their financial cooperation and collaborate on regulating virtual assets. In a recent bilateral meeting in Abu Dhabi, they discussed financial infrastructure, cross-border trade settlements, and the potential use of central bank digital currencies (CBDCs). The UAE’s Securities and Commodities Authority has already started allowing crypto firms to apply for operating licenses, and Hong Kong-based crypto custodian Hex Trust was among the first to receive one.
With a focus on cross-border trade settlements, the collaboration between the two central banks could pave the way for CBDCs, which could enhance the speed and reduce the costs of transfers while decreasing reliance on the U.S. dollar. The Central Bank of the UAE has already announced its ambitions for a digital dirham, with the first phase set to be completed within a year. Both Hong Kong and the UAE have been jointly developing mBridge, a blockchain platform that supports multiple CBDCs, aiming to improve cross-border payment systems. While the implementation of CBDCs in Hong Kong may face complexities, with concerns over Beijing’s influence, the region is exploring its own electronic form of the Hong Kong dollar, launching a pilot involving 16 firms to explore various use cases.
Clever Robot News Desk 2ndJune 2023