Hong Kong and the United Arab Emirates (UAE) are strengthening their financial cooperation by collaborating on various fintech initiatives. One of the main areas of focus is the development of Central Bank Digital Currencies (CBDCs) to improve cross-border trade, payment systems, and virtual asset regulations. The central banks of both countries have formed a joint working group to advance these collaborative efforts, involving stakeholders from the banking sectors. The UAE is making progress in its plans to introduce a digital dirham, with the first phase of its CBDC strategy expected to be completed within a year. Additionally, the UAE is actively involved in the mBridge project, a blockchain platform that facilitates multiple CBDCs and addresses limitations in cross-border payment systems.
The Hong Kong Monetary Authority (HKMA) has been working to enhance financial ties with the UAE and Saudi Arabia through trips and visits to establish stronger connections with local financial stakeholders. The HKMA aims to cooperate with financial regulators, sovereign wealth funds, institutions, family offices, and local enterprises to lay the foundation for long-term collaboration in the financial sector. A bilateral working group has been formed between the HKMA and the Central Bank of the UAE, focusing on market connectivity, CBDCs, financial infrastructure development, central bank digitalization, and virtual asset advancement. A Memorandum of Understanding has also been signed to facilitate joint discussions on financial innovation.
The collaboration between Hong Kong and the UAE reflects their shared vision and mutual interests in promoting financial cooperation and embracing innovative technologies. Both jurisdictions possess complementary strengths that can benefit their economies and societies. Yu Weiwen, Chief Executive of the HKMA, expressed confidence in Hong Kong’s future as an international financial center and highlighted plans to expand its network and forge closer ties with central banks, institutional investors, and financial regulators in various regions.
In conclusion, Hong Kong and the UAE are working together on fintech initiatives such as CBDC development to enhance their financial cooperation. The collaboration signifies their shared vision and mutual interests in promoting financial innovation. Hong Kong aims to strengthen its position as an international financial center by expanding its network and exploring new market opportunities.
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