First Digital, a trust company and qualified custodian based in Hong Kong, is introducing a novel stablecoin that will be tied to the U.S. dollar but subject to regulation in Asia.
The stablecoin, called FDUSD (First Digital USD), aims to maintain a one-to-one backing with the U.S. dollar or an equivalent asset of fair value. First Digital plans to hold the reserves in segregated accounts at Asian financial institutions, ensuring transparency and security.
FDUSD stands out for its programmability, enabling the execution of financial contracts, escrow services, and insurance without intermediaries. First Digital Labs, the company's division, will actively collaborate with local and international regulatory authorities to ensure compliance with existing and forthcoming laws and regulations. They intend to contribute to the development of regulatory frameworks that may encompass FDUSD and First Digital in the foreseeable future.
Highlighting the advantages of stablecoins, First Digital emphasizes their potential for stability, remittance, and protection against central bank influences on domestic currencies.
This announcement gains significance as Hong Kong prepares to implement new "Guidelines for Virtual Asset Trading Platform Operators" on June 1. These guidelines outline standards for asset custody, client asset segregation, conflict of interest avoidance, and cybersecurity, as stated by the Securities and Futures Commission of Hong Kong.
Meanwhile, regulatory uncertainties in the United States have prompted concerns among industry players, who warn that the country's leadership position in the cryptocurrency sector may be compromised as activities move to more favorable jurisdictions. Brian Armstrong, the CEO of Coinbase, recently commented that Hong Kong's emergence as a crypto hub should come as no surprise.