June 2, 2023
By Sharan Kaur Phillora
Hong Kong-based qualified custodian and trust company First Digital is introducing a new stablecoin that will be pegged to the U.S. dollar but regulated in Asia.
Here’s what we know:
Dubbed “First Digital USD,” or FDUSD, the coin is intended to be backed on a one-to-one basis by one U.S. dollar or asset of equivalent fair value, the company said in a statement, adding that the reserves would be held in segregated accounts at institutions in Asia.
The company emphasizes its commitment to compliance with current and future regulations, stating that it will collaborate with regulatory authorities both locally and internationally. They aim to participate in shaping regulatory regimes that may apply to FDUSD and First Digital in the foreseeable future.
Stablecoins offer increased stability, and remittance capabilities and serve as a hedge against central bank policies impacting domestic currencies, the statement explains.
This announcement coincides with the implementation of new guidelines for virtual asset trading platforms in Hong Kong, which prioritize asset custody, client asset segregation, conflict of interest avoidance, and cybersecurity standards as outlined by the Securities and Futures Commission.
Amid regulatory uncertainty in the United States, industry leaders warn of the potential loss of the country’s position as a crypto leader. Some players suggest that businesses are moving operations to more accommodating jurisdictions. The CEO of Coinbase, Brian Armstrong, noted that Hong Kong’s emergence as a crypto hub is no surprise.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.