The Hong Kong Monetary Authority (HKMA) and the Central Bank of the United Arab Emirates (CBUAE) have agreed to strengthen cooperation on virtual asset regulations and developments.
The two central banks met on May 30, 2023, and discussed a range of topics, including cross-border trade settlement and how UAE corporations can leverage Hong Kong's financial infrastructure platforms to gain access to Asian and mainland markets.
The collaboration comes as Hong Kong's Securities and Futures Commission (SFC) is allowing virtual asset service providers (VASPs) to cater to retail investors in Hong Kong starting June 1.
The SFC has said that it will take a "technology-neutral" approach to regulating VASPs, and that it will focus on ensuring that they are properly capitalized and have adequate risk management systems in place.
The collaboration between the HKMA and the CBUAE is a positive development for the cryptocurrency industry. It shows that central banks are taking a serious look at cryptocurrencies and are willing to work with the industry to develop regulations that are both effective and supportive of innovation.
