Hong Kong and UAE authorities recently met in Abu Dhabi to discuss ways to strengthen cooperation on crypto regulations, taking into consideration the pros and cons of creating a friendly environment for global crypto companies. Both jurisdictions are positioning themselves as nations that are open to innovation in the world of cryptocurrencies; hence, they have agreed to establish a joint working group on virtual assets.
As part of their efforts to make cross-border trade easier and explore how companies from UAE can access Hong Kong’s financial infrastructure platforms to enter Asian and mainland Chinese markets, senior executives from banks in both regions organized a seminar. Among the banks participating were First Abu Dhabi Bank, Abu Dhabi Islamic Bank, Emirates NBD, Bank of China, Citi, HSBC, and Standard Chartered.
To further encourage global crypto firms to join the market, Hong Kong has implemented crypto-friendly measures, such as ending its ban on retail crypto trading. From June 2023, licensed digital asset firms will be able to offer services to local investors. Big players in the crypto industry, like Huobi, Gate Group, OKX, and BitMEX, have expressed interest in operating in Hong Kong.
Simultaneously, the UAE has announced that its federal securities regulator is now accepting applications from organizations interested in providing crypto-related services, except for those companies already operating within financial free zones. Dubai attracted over 500 crypto startups in 2022 alone, triggering the launch of the Virtual Assets Regulatory Authority (VARA) in March 2022 to regulate crypto trades and ensure investor protection.
Several companies, such as Komainu, OKX, and Binance, are now looking to break into the UAE market. To guarantee the safety of its local crypto sector, the emirates’ central bank recently published guidelines on preventing money laundering.
The collaboration between Hong Kong and UAE holds the potential to benefit both markets and attract global crypto companies. However, the joint efforts also pose various challenges, such as the possibility of entering an extremely competitive space, regulatory uncertainty surrounding the crypto sector, and the need to strike a balance between fostering innovation and protecting investors.
In conclusion, the collaboration between Hong Kong and UAE to create a safe and attractive environment for crypto companies can open new opportunities for investors and the global crypto market. Yet, both regulators will need to carefully address the challenges emerging in this dynamic sector as they work towards building a strong and sound regulatory framework for virtual assets.
Source: Blockworks
