Hong Kong custodian to launch dollar-pegged stablecoin

Hong Kong-based custodian and trust company First Digital announced plans to launch First Digital USD (FDUSD) — stablecoin pegged to the U.S. dollar.

We are extremely excited to announce First Digital is introducing a new #stablecoin, First Digital USD (FDUSD), which is pegged to the U.S dollar but regulated in Asia! FDUSD will aim to provide a stable & reliable anchor to instill confidence in users. https://t.co/qHg5loOH4R

— First Digital (@FirstDigitalHQ) June 1, 2023

In a discussion with CoinDesk a company representative explained that the ‘stablecoin’ will be issued on Ethereum and BNB Chain, with talks underway for listing with ‘all the major Bitcoin exchanges’.

The asset will be regulated by the authorities of the Hong Kong Special Administrative Region. It will not be available to retail investors in Hong Kong.

It is expected that the situation will change during 2023-2024 after the Hong Kong Monetary Authority introduces mandatory licensing for stablecoin issuers. The authority plans to supervise the management, issuance and safeguarding of the token peg to fiat.

“First Digital Labs will work closely with local and international regulators to ensure full compliance with current and future regulations”, the company said.

The issuer will hold stablecoin reserves on segregated accounts at institutions in Asian countries.

FDUSD will gain programmability, enabling the execution of financial contracts, escrow-operations and insurance without intermediaries.

Since June 1, 2023 the rules SFC established, including safe custody of assets, client asset segregation, avoidance of conflicts of interest and cybersecurity standards.

Earlier, Circle CEO Jeremy Allaire called enforcement actions the main factor dragging down the capitalization USDС. The executive did not rule out the United States losing its leading position in the sector to the EU, Hong Kong and the UAE.