Hong Kong-based asset custody and trust company First Digital announced its new stablecoin, First Digital USD (FDUSD), pegged to the US dollar but intended for use within Asia. Upon First Digital’s announcement, Binance CEO Changpeng Zhao (CZ) took to Twitter to assert that FDUSD is based on the BNB Smart Chain (BSC).
Information Revealed about First Digital USD
First Digital explained that the purpose of FDUSD is to be backed 1:1 by the US dollar or a tangible asset of equivalent worth, with reserves kept separate from company/client assets in Asian institutions. The company further stated that the stablecoin is programmable, facilitating financial contracts, escrow services, and insurance transactions without intermediaries.
First Digital Labs will closely cooperate with local and overseas regulatory bodies to ensure full compliance with current and future relevant laws and regulations. They will also be involved in shaping the evolution of FDUSD and/or First Digital, including any foreseeable regulatory regimes that may apply in the future.
The announcement also added, “Stablecoins provide greater stability and a variety of money transfer options while offering protection against central bank policymakers attempting to affect local currencies.”
CZ, CEO of Binance, the world’s largest cryptocurrency exchange by volume, made a significant announcement on his personal Twitter account following the FDUSD unveiling. He confirmed that First Digital’s stablecoin FDUSD is based on the BNB Smart Chain (BSC).
FDUSD and Hong Kong
The announcement of FDUSD has caused quite a stir, particularly as it coincided with the implementation of Hong Kong’s upcoming Guiding Principles for Virtual Asset Trading Platform Operators.
According to the Hong Kong Securities and Futures Commission, rules will be set for virtual asset trading platform operators, like crypto exchanges and trading platforms. These rules will ensure the secure storage of digital assets, separate holding of customer/company assets, avoidance of conflicts of interest, and the establishment of cybersecurity standards.
On the other hand, regulatory uncertainty in the US is prompting warnings that the country could lose its leading position in the sector as it pushes crypto companies towards more friendly jurisdictions. Recently, Coinbase CEO Brian Armstrong suggested that regulatory uncertainty in the US was behind Hong Kong’s positioning as a new crypto hub, stating it was “no surprise”.
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