Key takeaways:
- With agreements for tokenization, Hong Kong is extending its financial cooperation with the Kingdom of Saudi Arabia.
- The central banks also agreed to cooperate in discussions on financial innovation by signing a MoU.
With agreements for tokenization and payment infrastructure, Hong Kong is extending its financial cooperation with the Kingdom of Saudi Arabia.
To further integrate financial services between the two nations, a bilateral meeting was held on July 26 between the Saudi Central Bank (SAMA) and the Hong Kong Monetary Authority (HKMA).
The development of financial infrastructure, open market operations, market interconnection, and sustainable growth were among the topics the HKMA and the SAMA discussed during the conference. The central banks also agreed to cooperate in discussions on financial innovation by signing a Memorandum of understanding (MoU).
According to a joint official notice, the governments of Hong Kong and Saudi Arabia also used the occasion to exchange knowledge in fields like tokenization, payment infrastructure, and supervisory technologies. Eddie Yue, the head of the HKMA, said:
“There is a lot of room for cooperation between the Kingdom of Saudi Arabia and Hong Kong in the fields of economy and trade, sustainable development, finance and fintech,”
According to SAMA governor Ayman Alsayari, the MoU would not only support the future growth of relations between Saudi Arabia and Hong Kong but would also be beneficial to them now.
Despite the HKMA recently enabling retail investors to trade cryptocurrencies, the announcement makes no mention of whether the development would involve any collaborative activities using digital currencies like Bitcoin.
On the other hand, the Saudi Arabian government hasn’t publicly stated any plans to promote cryptocurrencies in recent years other than to warn that Bitcoin will “not be recognized by legal entities” there in 2019.
Hong Kong already takes part in several cross-jurisdictional tokenization projects. The BOCI investment bank unit of the Bank of China issued a $28 million tokenized asset in Hong Kong in the middle of June that was created on the Ethereum blockchain.
The initiative made use of the GS DAP tokenization technology from Goldman Sachs as well as currency tokens that represented claims against the Hong Kong dollar.
In June, the Financial Services Authority (FSA) of Japan and the Monetary Authority of Singapore (MAS) launched a collaboration for the joint regulation and pilot testing of cryptocurrency projects in line with the latter’s “Project Guardian” program. To look into use cases involving different asset classes, Project Guardian will engage with policymakers.
