Bitcoin is “not recognized by legal entities,” the Saudi Central Bank cautioned in 2019, but it hasn’t spoken much more about cryptocurrencies since then.
Financial cooperation between Hong Kong and the Kingdom of Saudi Arabia is progressing, with a particular emphasis on tokenization and agreements relating to the infrastructure of payments. The Saudi Central Bank (SAMA) and the Hong Kong Monetary Authority (HKMA) joined forces to improve the integration of financial services between the two countries on July 26 during a bilateral meeting.
The agenda for the gathering included a number of objectives, such as the growth of the financial infrastructure, open market operations, market interconnection, and sustainable development. A Memorandum of Understanding (MoU) was also signed by the central banks to promote collaboration in discussions regarding financial innovation.
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The authorities from Hong Kong and Saudi Arabia exchanged knowledge in fields like tokenization, payment infrastructure, and supervisory technologies during the fruitful meeting. Eddie Yue, the chief executive of the Hong Kong Monetary Authority, stressed the possibility of major cooperation between the two nations in a range of economic and fintech-related industries.
Related: Hong Kong Crypto Plans Dependent on China's Approval
Ayman Alsayari, governor of SAMA, praised the MoU for not only enhancing the already-strong ties between Hong Kong and Saudi Arabia but also setting them up for a bright future of cooperation.
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Although Bitcoin is not specifically mentioned in the release, it follows the HKMA’s recent approval of retail investors’ ability to trade cryptocurrency. However, the Saudi Arabian government has not actively supported cryptocurrencies in recent years, rather issuing a warning that, as of 2019, legitimate companies in the nation do not accept Bitcoin.
It is unclear whether collaborative activities in the cryptocurrency field will be a part of the evolution as this financial cooperation takes shape. However, the issuing of a $28 million tokenized asset on the Ethereum blockchain by the investment bank affiliate of the Bank of China, BOCI, in mid-June shows that Hong Kong is already actively taking part in various tokenization activities. The project successfully utilized Goldman Sachs’ tokenization protocol GS DAP, accompanied by cash tokens representing claims on the Hong Kong dollar.
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The partnership between Saudi Arabia and Hong Kong represents an exciting development for both countries in embracing financial innovation and enhancing their economic connections. The financial environment is primed for significant advances as they continue to investigate the potential of tokenization and cutting-edge payments infrastructure.