UAE and China Strengthen Anti-Crypto Fraud Measures

Following UAE President Mohammed bin Zayed Al Nahyan’s state visit to China, both nations have pledged to intensify their efforts against crypto-related fraud. The announcement, made on May 30, highlights the increasing concern over the rise in crypto fraud incidents, particularly in Hong Kong.

The joint statement emphasized the shared determination to tackle telecommunications network fraud and online gambling, both of which often involve cryptocurrency exploitation. This collaborative approach underscores a commitment to curb illegal activities linked to digital currencies.

Broader Security and Financial Collaboration

Beyond cybercrime, the UAE and China also committed to combating money laundering, human trafficking, drug trafficking, and illegal immigration. This comprehensive effort aims to address all forms of illicit financial flows, including those involving cryptocurrencies.

While the statement did not detail specific crypto regulations, it pointed to a coordinated strategy to prevent the misuse of crypto technologies. This approach aligns with broader efforts to ensure financial security and stability.

In addition to security measures, the statement highlighted the importance of supporting bilateral trade and investment. The UAE and China agreed to enhance trade, facilitate investment, and develop tourism through the Joint Economic and Trade Committee.

A significant aspect of the collaboration is the focus on central bank digital currencies (CBDCs). The UAE and China are committed to deepening cooperation on CBDCs under their existing Memorandum of Understanding. Notably, China praised the UAE for completing the first direct cross-border CBDC transaction using the “Digital Dirham” on the “Multilateral Central Bank Digital Currency Bridge (mBridge)” platform, valued at 50 million dirhams. This milestone paves the way for new opportunities in trade and investment.

Hong Kong is actively involved in CBDC development with projects like MBridge and e-HKD. The Hong Kong Monetary Authority (HKMA), in collaboration with the central banks of China, Thailand, and the UAE, aims to launch MBridge by mid-2024. This project could provide an alternative to Swift’s payment infrastructure, potentially transforming global payment systems.

The e-HKD project also demonstrates various use cases for digital currency, including payments, deposits, and investments. These initiatives reflect Hong Kong’s pivotal role in advancing CBDC technology and integration.