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A compliant stablecoin
Hong Kong-based custody firm First Digital announced today that it will launch a US dollar stablecoin, First Digital USD (FDUSD).
Although not stated in the press release, Binance CEO Changpeng Zhao (CZ) said that FDUSD will be issued on the BNB smart chain. First Digital said it will offer a new stablecoin, adding more options to the cryptocurrency market.
We at First Digital are both excited and delighted at the support we’ve recieved so far with this initiative. @cz_binance for the nod!! #stablecoin #innovation https://t.co/o61PXj0mad
—First Digital (@FirstDigitalHQ) June 1, 2023
What is a stablecoin
A cryptocurrency whose price is always stable. Various stablecoins have been developed whose value is backed by legal currency or virtual currency, or whose price is stabilized by algorithms.
Cryptocurrency Glossary
connection: What is a stablecoin that even beginners can understand | Explain features and use cases
First Digital is a custody company with a business license. Technically, subsidiary First Digital Labs issues FDUSD.
FDUSD is a stablecoin backed by US dollars or assets with equivalent value. It is programmable and can also be used for services such as intermediary contracts and insurance. The purpose of First Digital’s issuance of FDUSD is to reduce the risk of price fluctuations in the cryptocurrency market and increase the efficiency of financial transactions.
As a regulated company, the press release emphasizes that it is a safe stablecoin. Prioritizing transparency and credibility, the underlying assets will be separated from the company’s assets and held in regulated financial institutions in Asia. It did not mention the FDUSD launch schedule.
First Digital CEO Vincent Chok had the following to say about the announcement:
Our mission is to provide a safe and efficient digital currency that can be used seamlessly in everyday transactions. The launch of this stablecoin is a big step.
Especially now, when the traditional financial system is becoming more uncertain. Transparency and strong oversight are paramount for stablecoins and blockchain technology.
Targeting the global market
Headquartered in Hong Kong, where new cryptocurrency exchange regulations went into effect this month, First Digital is targeting global markets. The title of the press release states, “Transforming the global financial system.” Mr. Chok also commented to that effect. At the same time, it also said it would establish a cooperative relationship with Hong Kong regulators.
Hong Kong has instead put in place regulations to allow retail investors to trade cryptocurrencies with new regulations. Hong Kong’s Securities and Futures Commission (SFC) has also stipulated that stablecoins cannot be used by retail investors until stablecoin regulations are in place sometime between 2023 and 2024.
connection: Chinese state TV reports Hong Kong cryptocurrency news, commented by Binance CZ
In Hong Kong, the Hong Kong Monetary Authority (HKMA), which is equivalent to the central bank, is developing and testing a Central Bank Digital Currency (CBDC). Last month, US company Ripple announced that it would participate in the “e-HKD pilot program” and develop a use case to realize the tokenization of real estate assets.
connection: Ripple Participates in Hong Kong’s CBDC Pilot Program and Pursues the Potential of Tokenizing Real Estate Assets
The post Hong Kong Custody Firm to Launch FDUSD Stablecoin on BNB Chain appeared first on Our Bitcoin News.
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