Hong Kong and UAE Sign Landmark Digital Asset Regulatory Agreement

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HK and UAE regulators sign historic MOU to link digital asset markets. Learn how this impacts cross-border funds and crypto compliance in 2026.

The UAE Capital Market Authority and Hong Kong's Securities and Futures Commission signed a Memorandum of Understanding on 27 January 2026 to strengthen regulatory cooperation on digital assets.
This represents the first bilateral supervisory agreement between the SFC and an overseas regulator dedicated specifically to digital asset matters.
The agreement establishes formal channels for consultation, information exchange, and coordinated oversight of entities operating in both jurisdictions.
The MOU builds upon a mutual fund recognition agreement signed between the two regulators in September 2025.
Cross-border regulated entities will benefit from streamlined regulatory coordination and reduced duplication of compliance requirements.
Both jurisdictions are positioning themselves as leading sustainable digital asset hubs in their respective regions.

The UAE Capital Market Authority (CMA) and Hong Kong's Securities and Futures Commission (SFC) have signed a historic Memorandum of Understanding to enhance regulatory cooperation on digital asset activities. The agreement, signed on 27 January 2026 during the 19th Asian Financial Forum in Hong Kong, marks the first bilateral supervisory arrangement between the SFC and an overseas regulator focused exclusively on digital assets.

The MOU was signed by H.E. Waleed Saeed Al Awadhi, Chief Executive Officer of the UAE CMA, and Ms Julia Leung, Chief Executive Officer of the Hong Kong SFC. Dr Kelvin Wong, Chairman of the SFC, witnessed the ceremony. The signing followed a Digital Assets Roundtable where senior executives from the digital asset industry discussed ecosystem development.

Framework for Cross-Border Supervision

The agreement establishes a comprehensive framework for regulatory cooperation covering mutual consultation on digital asset regulatory matters, information exchange for cross-border supervision, and coordinated oversight of entities regulated by both authorities. The MOU defines a "Cross-Border Regulated Entity" as any entity regulated by both authorities, or an entity in one jurisdiction with a material connection to the other.

Cooperation will focus on circumstances including pending regulatory changes that materially impact cross-border entities, events that could adversely affect financial or operational stability such as major cyberattacks or system failures, and changes in ownership, risk management policies, or financial resources. The authorities may also exchange information regarding market conduct issues and regulatory breaches.

Official Statements

H.E. Waleed Saeed Al Awadhi stated that the MOU strengthens supervisory cooperation between the CMA and SFC on regulated digital asset activities. He noted it establishes clear channels for consultation and information exchange, supporting effective oversight in a cross-border market, with the shared objective of enabling responsible innovation while upholding market integrity and strong investor protection.

Ms Julia Leung expressed satisfaction that the SFC's bilateral supervisory relations with the CMA had expanded from mutual recognition of funds to supervisory collaboration on digital asset entities. She noted the MOU will support responsible financial innovation for both Hong Kong and the UAE, fostering sustainable growth of Hong Kong's digital asset ecosystem.

Building on Existing Cooperation

The digital asset MOU builds upon a Mutual Recognition of Funds agreement signed on 18 September 2025 between the SFC and the UAE's then-Securities and Commodities Authority. That arrangement marked the first mutual fund recognition agreement between Hong Kong and a Middle Eastern market, covering equity, bond, mixed-asset funds, feeder funds, unlisted index funds, and exchange-traded funds.

The CMA and SFC also co-convened a CEO-level Asset Management Roundtable on 27 January 2026, bringing together senior executives from both regulators and leading global asset management firms. The roundtable explored opportunities to deepen cooperation between UAE and Hong Kong asset management sectors.

UAE Regulatory Transformation

The agreement comes shortly after the UAE underwent a major capital markets regulatory overhaul. The Securities and Commodities Authority was formally reconstituted as the Capital Market Authority on 1 January 2026 under Federal Decree-Law No. 32 of 2025. The new CMA framework grants the authority expanded supervisory powers, including enhanced enforcement powers with administrative fines up to AED 200 million.

Federal Decree-Law No. 33 of 2025 explicitly extends the CMA's jurisdiction to virtual assets regulation, maintaining an official list of virtual assets that may be traded in the UAE. This positions the CMA alongside Dubai's Virtual Assets Regulatory Authority and Abu Dhabi Global Market's Financial Services Regulatory Authority in the UAE's multi-layered regulatory framework for digital assets.

Implications for Market Participants

Digital asset entities operating in both jurisdictions will benefit from streamlined regulatory coordination through established consultation channels and reduced regulatory duplication through information sharing. The framework provides enhanced regulatory certainty for cross-border operations and clear escalation pathways for issues affecting both jurisdictions.

For investors, the MOU framework offers enhanced protection through coordinated oversight and improved market integrity through information exchange on market conduct matters. Asset managers can leverage both the digital asset MOU and the existing mutual fund recognition framework to access expanded investor bases across Asia and the Middle East.