First Digital Launches FDUSD Stablecoin Amid Hong Kong Regulations
First Digital Group announced its launch of a USD stablecoin, FDUSD, which will be backed by "high-quality reserves" of cash and cash equivalents in regulated financial institutions around Asia. The stablecoin is issued on Ethereum and BNB, and the company is in discussions with all major exchanges for a listing.
Part of the requirements of Hong Kong’s Trust Ordinance is to keep all reserves in segregated accounts, which prevents co-mingling of assets. The stablecoin represents a major stride forward in our mission to provide a secure and efficient digital currency that can be seamlessly integrated into everyday transactions,” said Vincent Chok, CEO of First Digital.
However, as the stablecoin launches, it won’t be available to retail users in Hong Kong. Regulators in Hong Kong have said that stablecoins should not be allowed for public trading by retail investors until the proposed rules for this asset class are officially implemented in the territory.
The new regulations under review by the Hong Kong Monetary Authority (HKMA), could mandate local incorporation, require real-world asset backing and mandate separate operations for issuers and virtual asset exchanges.
Despite these regulatory challenges, the launch of FDUSD represents a significant milestone for the use of stablecoins in everyday transactions. Stability is one of the primary obstacles standing between cryptocurrencies and mainstream adoption, and stablecoins like FDUSD offer a way to overcome this obstacle.