The United Arab Emirates’ central bank is expected to join the Central Bank Digital Currency project in Hong Kong.
Hong Kong Monetary Authority (HKBA) has partnered with the Central Bank of the United Arab Emirates (CBUAE) to promote innovative financial services and regulatory development.
HKMA Chief Executive Eddie Yue and CBUAE Governor H.E. Abdulhamid M. Saeed Alahmadi signed a Memorandum of Understanding to enhance their fintech collaboration.
“The HKMA has been making considerable efforts to expand our international fintech network to include counterparts in the Middle East, and CBUAE is naturally a valuable partner of our network,” Yue said.
“We anticipate that a lot of synergies will arise from the strengthened collaboration under the MoU, and look forward to the CBUAE’s joining of our CBDC (Central Bank Digital Currency) project to enrich, and bring in new thoughts and perspectives for the project,” he added.
Under the MoU, the CBUAE will be allowed to join multiple CBDC bridge projects implemented by the HKMA, the Bank of Thailand, the Digital Currency Institute of the People’s Bank of China, and the Bank for International Settlements Innovation Hub Centre in Hong Kong.
“CBUAE has recently completed a wholesale CBDC proof of concept project with the Saudi Central Bank to settle domestic and cross-border transactions using central bank money on a distributed ledger technology,” Alahmadi said. “Building on this momentum, CBUAE is very excited to be able to use the experience gained so far and participate in the m-CBDC Bridge project.”
The m-CBDC project is expected to ease cross-border fund transfers, doing away with inefficiencies, high cost and complex regulatory compliance.