First Digital unveils Hong Kong-based USD stablecoin
Hong Kong-based trust company First Digital is set to introduce a new stablecoin, “First Digital USD” (FDUSD), which will be pegged to the US dollar and regulated in Asia.
In a June 1 release, First Digital announced that the stablecoin would be backed on a one-to-one basis by US dollars or equivalent assets of fair value, with the reserves held in segregated accounts at institutions in Asia.
One of the critical features of FDUSD is its programmability, enabling the execution of financial contracts, escrow services, and insurance without intermediaries.
First Digital emphasized its commitment to compliance with current and future laws and regulations, working closely with local and overseas regulatory authorities to shape the evolving regulatory regimes under which FDUSD and the company may fall.
According to the firm, stablecoins like FDUSD offer increased stability and serve as a means of remittance while also acting as a hedge against central bank policies that may impact domestic currencies.
The announcement by First Digital aligns with the upcoming practical guidelines for virtual asset trading platforms in Hong Kong, which aim to ensure asset safety, client asset segregation, avoidance of conflicts of interest, and cybersecurity standards.
The regulatory initiatives in Hong Kong are seen as a positive and progressive approach to fostering stability, compliance, and innovation in the cryptocurrency industry.
The move by First Digital and Hong Kong’s reputation as a friendly jurisdiction for cryptocurrencies further highlights concerns about the US’s regulatory ambiguity and its potential impact on the country’s crypto sector leadership.
Brian Armstrong, the CEO of Coinbase, recently pointed out the attractiveness of jurisdictions like Hong Kong, citing its positioning as a new crypto hub.
As the cryptocurrency industry continues to evolve, the developments by First Digital and the regulatory initiatives in Hong Kong demonstrate a commitment to creating an environment conducive to the sector’s growth while maintaining compliance with regulatory requirements.