Hong Kong-based First Digital rolls out USD stablecoin

Friday 2 June 2023 10:57 CET | News

Hong Kong-based company, First Digital, has released a new stablecoin that will be tied to the value of the US dollar but will operate under Asian regulations.


This announcement comes in light of Hong Kong's implementation of a new regulatory framework for digital assets.


What is First Digital USD

First Digital's stablecoin, known as First Digital USD or FDUSD, will be backed by one US dollar or an equivalent asset of fair value on a one-to-one basis. The company clarified that the reserves supporting FDUSD will be held in segregated accounts at institutions in Asia. Notably, FDUSD is a programmable stablecoin that enables the execution of financial contracts, escrow services, and insurance without intermediaries, according to First Digital.

In their statement, First Digital emphasised their commitment to full compliance with current and future applicable laws and regulations and expressed their intention to work closely with local and overseas regulatory authorities. They also highlighted their active involvement in shaping the regulatory evolution of FDUSD and First Digital in the foreseeable future.

Stablecoins like FDUSD offer increased stability, act as a means of remittance, and serve as a hedge against central bank policies that impact domestic currencies, according to First Digital. This announcement is especially significant given the upcoming implementation of Hong Kong ‘Guidelines for Virtual Asset Trading Platform Operators’ on June 1, which outline standards for asset custody, client asset segregation, conflict of interest avoidance, and cybersecurity.


US to lose leadership position in the crypto sector?

Meanwhile, regulatory uncertainties in the United States have prompted concerns among industry players about the potential loss of the country's leadership position in the cryptocurrency sector. Some argue that the sector may be offshored to more crypto-friendly jurisdictions. Coinbase CEO Brian Armstrong recently acknowledged Hong Kong's positioning as a new crypto hub, citing it as no surprise.

In line with this trend, Circle, a global digital financial technology firm, has filed applications in France to become a licensed Electronic Money Institution and a registered Digital Asset Service Provider, aiming to meet the rigorous requirements set by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and Autorité des Marchés Financiers (AMF). Circle's pursuit of full approval from the AMF could make it the first company to receive full authorization under the DASP regulatory regime.

Similarly, Societe Generale-FORGE, based in France, recently launched the CoinVertible digital asset denominated in Euros on the Ethereum public blockchain. In an interview with The Paypers, the Chief Executive Officer at SG-FORGE, Jean-Marc Stenger, explained that EUR CoinVertible plays a role in bridging traditional capital markets and digital assets.

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Keywords: stablecoin, cryptocurrency exchange, digital assets
Categories: DeFi & Crypto & Web3
Countries: Hong Kong
This article is part of category

DeFi & Crypto & Web3