Strengthening a Strategic Financial Partnership
The Central Bank of the United Arab Emirates and the Hong Kong Monetary Authority have taken another decisive step toward strengthening global financial connectivity, holding their third bilateral meeting in Abu Dhabi. The high-level discussions reflect a growing alignment between the two institutions as they work to expand cross-border capital flows and digital financial innovation between the Middle East and Asia.
The meeting was chaired by His Excellency Khaled Mohamed Balama, Governor of the Central Bank of the United Arab Emirates, and Eddie Yue, Chief Executive of the Hong Kong Monetary Authority. Senior officials and Assistant Governors from both sides participated, underscoring the strategic importance of the partnership and the shared commitment to enhancing cooperation at both regulatory and operational levels.
This latest engagement builds on the momentum established during their second bilateral meeting in Hong Kong in December 2024. Since then, both central banks have accelerated efforts to translate discussions into tangible frameworks that strengthen financial infrastructure connectivity and foster deeper capital market integration.
Expanding Cross-Border Market Connectivity
A central theme of the meeting was cross-border debt capital market connectivity. Both authorities examined ways to facilitate smoother access to capital markets, streamline settlement mechanisms, and reduce transaction costs for institutional investors operating across jurisdictions.
A landmark development emerged with the Central Bank of the United Arab Emirates formally joining Hong Kong’s Central Moneymarkets Unit (CMU), the city’s central securities depository for debt securities. This move follows a Memorandum of Understanding signed during the second bilateral meeting, which laid the groundwork for linking debt capital market infrastructures.
The CBUAE’s accession to the CMU represents a significant milestone in strengthening financial integration between the UAE and Asia. Through Hong Kong’s established financial infrastructure, the UAE and its investors now gain more direct and cost-effective access to Mainland China’s capital markets and a wider range of Asian financial assets.
For market participants in the United Arab Emirates, this step broadens diversification opportunities and enhances exposure to Asia’s dynamic growth markets. For Hong Kong, it reinforces its role as a gateway connecting global capital with China and the broader region. The initiative also reflects a shared ambition to build resilient financial corridors capable of supporting long-term cross-border investment flows.
Advancing Digital Finance and Innovation
Beyond traditional capital markets, the discussions extended into fast-evolving areas of digital finance. Both central banks reviewed developments in digital assets and tokenisation, recognising their transformative potential for global financial systems.
Tokenisation, which involves converting real-world assets into digital tokens on distributed ledger platforms, is increasingly viewed as a tool to enhance liquidity, transparency, and efficiency in financial markets. The CBUAE and HKMA explored regulatory considerations and technical standards that could support secure and scalable implementation of such technologies.
Central bank digital currencies (CBDCs) also featured prominently on the agenda. As global central banks evaluate the future of sovereign digital currencies, collaboration between regulators becomes critical to ensure interoperability, financial stability, and consumer protection. By sharing research insights and practical experiences, the two authorities aim to align frameworks that can facilitate seamless cross-border digital transactions.
Regulatory approaches to stablecoins were another key topic. With stablecoins gaining traction in both retail and institutional settings, the need for robust oversight mechanisms has become increasingly urgent. The dialogue focused on safeguarding financial stability while enabling innovation to flourish within clearly defined regulatory boundaries.
Supply chain financing was also discussed as an area of mutual interest. Enhanced cooperation in this field could support trade flows between the UAE, Hong Kong, and Mainland China, offering businesses improved access to working capital solutions through digital platforms and financial technology tools.
Leadership Perspectives on Mutual Growth
His Excellency Khaled Mohamed Balama highlighted that the growing collaboration reflects a shared commitment to strengthening cross-border financial connectivity and international partnerships. He noted that membership in the Central Moneymarkets Unit enables deeper engagement with Asian capital markets and global financial centres.
According to Balama, expanding access to diversified investment channels supports the United Arab Emirates’ ambition to reinforce its position as a leading international capital market hub. By bridging markets in the Middle East and Asia, the UAE continues to enhance its attractiveness for global investors seeking efficient and well-regulated financial ecosystems.
Eddie Yue welcomed the tangible progress achieved in implementing debt capital market connectivity and expressed satisfaction at the CBUAE’s participation in the CMU. He emphasised that the collaboration underscores Hong Kong’s role as a leading offshore Renminbi business centre and a premier gateway for international investors seeking exposure to China and Asian markets.
Yue also stressed that the ongoing cooperation demonstrates a clear and forward-looking vision for mutual growth and innovation. By aligning regulatory strategies and infrastructure development, both institutions are positioning themselves to navigate an increasingly interconnected global financial environment.
Building Resilient and Connected Financial Systems
The third bilateral meeting signals more than institutional cooperation; it reflects a broader shift toward multi-regional financial integration. As geopolitical and economic landscapes evolve, financial centres are increasingly seeking reliable partners to strengthen resilience and maintain stability in global capital flows.
For the UAE, strengthening ties with Hong Kong enhances its strategic outreach to Asian markets and supports its broader economic diversification agenda. For Hong Kong, closer engagement with the Gulf region deepens its international footprint and strengthens its connectivity beyond East Asia.
The partnership also highlights the importance of collaboration in addressing emerging risks associated with digital finance. By working together on regulatory standards for digital assets, stablecoins, and CBDCs, the CBUAE and HKMA are contributing to the development of balanced frameworks that combine innovation with prudential safeguards.
Such cooperation ensures that technological advancements do not outpace regulatory readiness. Instead, they become opportunities to build smarter, more efficient financial systems that serve businesses, investors, and consumers alike.
A Growing Bridge Between the Middle East and Asia
The evolving relationship between the CBUAE and HKMA represents a growing financial bridge between the Middle East and Asia. Through structured dialogue, policy coordination, and infrastructure integration, both authorities are creating pathways that support sustainable economic growth.
As cross-border capital mobility becomes increasingly central to global development, partnerships like this set an example of proactive regulatory diplomacy. The third bilateral meeting in Abu Dhabi stands as a testament to the determination of both institutions to translate vision into action.
By expanding market connectivity and advancing digital finance cooperation, the CBUAE and HKMA are not merely strengthening bilateral ties. They are shaping a framework for deeper global financial integration—one built on trust, innovation, and shared ambition for long-term prosperity.
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