Hong Kong and UAE banks have formed a bilateral working group to strengthen market interconnection, CBDC, and financial infrastructure.
Hong Kong and the United Arab Emirates (UAE) have strengthened their financial cooperation by working together on several technological initiatives. These initiatives include the development of central bank digital currencies (CBDCs) in an effort to improve cross-border commerce, payment systems, and virtual asset regulations.
Collaboration Between Hong Kong And UAE Central Banks
Hong Kong and the United Arab Emirates have founded a joint working group to advance their collaborative initiatives. The partnership includes parties from the two finance sectors. The development of Central Bank Digital Currencies is an essential area of focus.
The UAE has made progress toward implementing a digital dirham. The first phase of its CBDC strategy is anticipated to be concluded within a year. In addition, the UAE is actively involved in the mBridge initiative, a blockchain-based platform that supports multiple CBDCs and addresses limitations in cross-border payment systems.
The Central Bank of the United Arab Emirates, the Digital Currency Institute of People’s Bank of China, the Hong Kong Monetary Authority (HKMA), and the Bank of Thailand are collaborating with the Bank for International Settlements (BIS) Innovation Hub on the mBridge initiative.
Strengthening Hong Kong-UAE Economic Ties
The visit to the Middle East by Hong Kong SAR Chief Executive John Lee Ka-chiu generated significant interest in enhancing economic and trade ties with the region.
In 2023, the Hong Kong Monetary Authority (HKMA) traveled to the United Arab Emirates (UAE) and Saudi Arabia to establish stronger ties with local financial stakeholders.
As a foundation for long-term collaboration within the financial sector, the HKMA seeks to strengthen cooperation with financial regulators, sovereign wealth funds, institutions, family offices, and local businesses.
Also, a “bilateral working group” has been founded between the Hong Kong Monetary Authority (HKMA) and the Central Bank of the United Arab Emirates (UAE Central Bank).
This partnership is centered on market connectivity, central bank digital currency (CBDC), financial infrastructure development, central bank digitalization, and virtual asset development. In addition, an MOU was signed to facilitate joint discussions on financial innovation.
Future Prospects for Financial Partnership Between Hong Kong and the United Arab Emirates
Hong Kong and the United Arab Emirates’ collaboration exemplifies their shared vision and mutual interest in advancing financial cooperation and embracing innovative technologies. Both territories have complementary assets and synergies that can mutually benefit their economies and societies.
Yu Weiwen, the chief executive of the HKMA, affirmed utmost confidence in Hong Kong’s future as an international financial center. He emphasized that the HKMA will strengthen its position by capitalizing on its assets, expanding its network, and enhancing its resilience.
In addition, he revealed plans to travel to various regions, including the Middle East, Southeast Asia, and mainland China, to forge closer connections with central banks, institutional investors, and financial regulators and explore new market opportunities for Hong Kong’s thriving financial sector.
