The Saudi Central Bank (SAMA) and the Hong Kong Monetary Authority (HKMA) have signed a memorandum of understanding (MoU) today to strengthen collaboration between the financial services sectors in the two jurisdictions.
The MoU was signed during a bilateral meeting held in Riyadh on July 26. Four major areas including financial infrastructure development, open market operations, market connectivity and sustainable development were discussed during the meeting.
The two jurisdictions also agreed to promote joint deliberations in financial innovation. The Governor of the SAMA Mr Ayman Alsayari and the Chief Executive of the HKMA Mr Eddie Yue signed the MoU at the SAMA headquarters in Riyadh.
The agreement mandates both parties to promote knowledge sharing in financial innovation and Fintech, focusing on emerging trends, best practices, regulatory issues, policies and legislations.
Collaboration between fintech hubs
Both Saudi Arabia and Hong Kong are two booming fintech hubs, particularly for cryptocurrencies. Hong Kong recently opened its doors to crypto companies to come and take advantage of its regulatory framework and prosper.
Saudi Arabia, even though it’s behind the United Arab Emirates in leading crypto innovation, is one of the upcoming countries in the region embracing the industry.
According to the Governor of the SAMA Mr Ayman Alsayari, the two authorities face similar challenges as emerging fintech hubs, and so need to collaborate on issues.
“Saudi Arabia’s financial sector is growing in size, with new entrants, new services, and new innovation each year, all supporting a diversified Saudi economy. As the Kingdom develops as a global Fintech hub, our links with other growing hubs become ever more important,” Alsayari said.
“HKMA is a longstanding partner of the Saudi Central Bank and also a leader in innovation. The MoU will support our relationship into the future, helping both authorities stay at the cutting edge and strengthening our ability to deal with mutual issues,” he added.
Also speaking on the collaboration, Mr Eddie Yue, Chief Executive of the HKMA, said the two parties both have huge potential and need to enhance mutual cooperation and exchange ideas on areas such as economy and trade, sustainable development, finance and Fintech.
“There is huge potential for collaboration between the Kingdom of Saudi Arabia and Hong Kong in areas spanning across economy and trade, sustainable development, finance and Fintech,” Yue said.
“The MoU, in particular, will further enhance mutual cooperation as well as exchange of information and expertise between the SAMA and the HKMA in financial innovation and Fintech. We look forward to working with the SAMA to promote investment and financial market connectivity between the Middle East and Asia,” he concluded.
The two jurisdictions also had an opportunity to share their own experiences in research and innovation, discussing progress made in areas such as supervision technologies (Suptech), tokenization and payment infrastructure.
A win for crypto
This MoU holds excellent potential for the crypto industry in both jurisdictions. Hong Kong is a fast-growing crypto hub that is ahead of Saudi Arabia. However with this collaboration, it is likely to influence Saudi Arabia more in favor of cryptocurrencies.
More of such collaborations are required between countries to enable crypto innovation to thrive in such places. It will not be a surprise to see Saudi taking some major steps towards embracing crypto innovation as well moving towards regulatory clarity for the industry in the coming months.