In an effort to strengthen cooperation and promote joint fintech development initiatives, the Hong Kong Monetary Authority (HKMA) and the Central Bank of the United Arab Emirates (CBUAE) have agreed to collaborate on virtual asset regulations and developments. This collaboration between the two central banks will bolster their respective financial service sectors, as they share many complementary strengths and mutual interests.
Both jurisdictions are keen on exploring ways to improve cross-border trade settlement and enabling UAE corporations to leverage Hong Kong’s financial infrastructure platforms to gain access to Asian and mainland markets. CBUAE governor H.E. Khaled Mohamed Balama anticipates this relationship to be long-term and beneficial for both parties involved.
Interestingly, the collaboration coincides with Hong Kong’s Securities and Futures Commission (SFC) allowing virtual asset service providers (VASPs) to cater to retail investors in Hong Kong starting June 1. This move is backed by Hong Kong’s treasury chief Christopher Hui, who believes that virtual assets are here to stay and their benefits outweigh the risks. Despite the potential risks involved, he emphasizes the importance of regulated virtual assets to harness their positive elements.
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. These moves mark a significant shift in the global positioning of cryptocurrency markets and trading platforms.
On the other hand, restrictive crypto policies in the United States could ultimately benefit “adversary nations” like China, warns Coinbase CEO Brian Armstrong. He suggests that while recent turbulence in crypto markets might tempt US policymakers to write off cryptocurrencies as an unstable asset class, doing so could prove detrimental to the US economy in the long run. Moreover, Armstrong highlights that countries like Hong Kong and China are positioning themselves as global crypto hubs, potentially challenging the US’s role as a financial leader.
In conclusion, the collaboration between HKMA and CBUAE marks a significant development in the global virtual asset regulatory landscape. The willingness of these financial institutions to cooperate and explore mutual benefits in the cryptocurrency market paves the way for fostering innovation, while maintaining investor protection. Furthermore, as more countries open up to the potential of virtual assets, it remains to be seen how the global regulatory environment evolves in the coming years.
Source: Cointelegraph
