The Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority (HKMA) agreed to strengthen cooperation in regulating virtual assets during a bilateral meeting in Abu Dhabi on Monday.

See related article: Hong Kong Web3 industry forms new associations to push crypto hub ambition

Fast facts

  • The two central banks are planning to form a joint working group to push forward developments in crypto regulation. According to a report by the HKMA released Tuesday, the working group will focus on strengthening bilateral ties in areas including financial infrastructure and market connectivity.
  • “Hong Kong and the UAE are two financial centers sharing many complementary strengths and mutual interests, and there is much room for market participants from these two places to work together and build up the connectivity,” said HKMA chief executive Eddie Yue.
  • The United Arab Emirates is taking an increasingly proactive approach towards regulating crypto. In April, its regulators began accepting applications from cryptocurrency businesses for operating licenses in the region.
  • Meanwhile, Hong Kong will roll out a new set of rules for its cryptocurrency sector on June 1. This regulatory framework will establish clear licensing standards for virtual assets in the region.
  • “Hong Kong will more than likely become not just Asia’s crypto hub, but the de-facto crypto hub globally,” Vincent Chok, chief executive officer of Hong Kong-based consultancy First Digital Trust, said via email. “The U.S. is in a holding pattern with its regulation paralysis, and Dubai has ambitions to become a crypto hub, but in terms of innovation, Hong Kong still leads.”

See related article: In battle to be Asia’s crypto hub, which city will emerge victorious?