First Digital, a trust company and qualified custodian based in Hong Kong, has announced the launch of its new stablecoin called First Digital USD (FDUSD). FDUSD is pegged to the U.S. dollar and operates under regulation in Asia. The unveiling of this stablecoin aligns with the introduction of a fresh regulatory framework for digital assets in Hong Kong.
The primary objective of FDUSD, as stated in a press release, is to offer a stable and dependable digital currency amidst the volatile crypto market. The tokens of FDUSD are backed by high-quality reserves consisting of cash and cash equivalents. The intention is to ensure that FDUSD tokens can be redeemed on a 1:1 basis for U.S. dollars or other assets of equivalent fair value.
First Digital, being a registered company under Hong Kong’s Trust Ordinance, has the obligation to hold all FDUSD reserves in segregated accounts at regulated financial institutions in Asia. This segregation prevents any commingling of FDUSD reserves with other assets owned by First Digital Trust Limited.
Additionally, First Digital emphasizes that the stablecoin is programmable, enabling the execution of various financial contracts, escrow services, and insurance without the need for intermediaries. Vincent Chok, the CEO of First Digital, expressed his enthusiasm for the launch, emphasizing the stablecoin’s potential to provide a secure and efficient digital currency that seamlessly integrates into everyday transactions.
The introduction of FDUSD coincides with the implementation of new guidelines for virtual asset trading platform operators in Hong Kong, effective from June 1. This timing is significant as the United States faces regulatory uncertainty, causing concerns among industry players who worry about potential setbacks to the country’s leadership position in the crypto sector. Brian Armstrong, the CEO of Coinbase, recently acknowledged Hong Kong’s efforts to establish itself as a new crypto hub and highlighted the favorable environment it offers for crypto-related businesses.