First Digital Group Debuts Programmable Stablecoin on BNB Smart Chain
- Hong Kong-based trust firm First Digital Group has debuted a new USD-pegged stablecoin on the BNB Chain.
- The stablecoin, termed FDUSD, will be issued by FD121 Limited under the brand name “First Digital Labs.”
- The cryptocurrency will offer diversification from the stablecoins that already exist and dominate the crypto industry.
- FDUSD is a programmable stablecoin and is therefore capable of executing financial contracts, escrow services, etc.
- It is also a redeemable stablecoin and can be converted for fiat at any point by a user.
Following the collapse of the Terra ecosystem and the UST stablecoin (no USTC), the crypto industry lost faith in the usage of these cryptocurrencies, which are pegged to fiat currencies at a 1:1 ratio. People started using their trusted stablecoins like Tether USD (USDT) and Circle’s USDC. Nevertheless, a Hong Kong-based and licensed trust company and custodian, the First Digital Group, has announced the launch of a new stablecoin pegged in a 1:1 ratio to the US dollar on the BNB chain, the native blockchain of the world’s biggest crypto exchange, Binance.
As per the official statement from the Hong Kong-based custodian and trust firm, the new stablecoin has been named the First Digital USD, or FDUSD, and has been issued by FD121 Limited under the brand name “First Digital Labs.” The stablecoin is intended to be backed on a 1:1 basis by one US dollar or an asset of equivalent fair value held in the accounts of regulated financial institutions in Asia.
“The launch of this 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. Transparency and robust oversight are paramount in building trust in stablecoins and, in turn, the adoption of this innovative blockchain technology, especially at a time when stability in the traditional financial system is uncertain,” Vincent Chok, CEO of First Digital Group, stated.
The CEO of the world’s largest crypto exchange, Changpeng Zhao, also known as CZ in the crypto space, confirmed that the FDUSD stablecoin has been launched on the BNB Smart Chain.
The new US dollar pegged stablecoin will offer diversification from the stablecoins that already exist in the crypto industry and are currently dominating the market like the USDT and the USDC. As noted earlier, the FDUSD stablecoin will be issued by FD121 Limited, a subsidiary of the First Digital Group.
While noting the benefits of stablecoins, the First Digital Group noted that these fiat-pegged cryptocurrencies offer “increased stability, a form of remittance, a hedge against central bank policymakers who seek to influence their domestic currencies, and an economical form of accessing financial services at a time of heightened volatility in the current, global financial system.”
It is important to mention here that FDUSD is a programmable stablecoin and is therefore capable of executing financial contracts, escrow services, and insurance without intermediaries. The users will be provided with “a reliable digital currency aimed at reducing volatility in the cryptocurrency market, enhancing the efficiency of financial transactions by lowering transaction costs, and offering faster, more secure transactions,” said the First Digital Group.
All the reserves of the stablecoin will be kept in segregated accounts in cash or highly liquid assets by First Digital Trust Limited, a trust company registered under the Trustee Ordinance of Hong Kong. This will provide insurance to the users that the stablecoin is 100% backed and its reserves are safe and sound under a government regulated firm.
An important feature of this stablecoin by First Digital Group is that it has a redeemable nature, which means that it is backed by high-quality reserves–cash and cash equivalents—and, as a result, users can redeem their FDUSD tokens for their equivalent value in US dollars.
“First Digital Labs will work closely with local and overseas regulatory authorities to ensure full compliance with current and future applicable laws and regulations, and First Digital Labs will participate in the shaping of their evolution, including the shaping of any regulatory regimes that FDUSD and/or First Digital may fall under in the foreseeable future,” read the announcement.
As reported earlier by BitcoinWisdom, new crypto laws have been established in Hong Kong that took effect on June 1, 2023. The country aims to become a crypto and blockchain hub, and recently the Financial Secretary of Hong Kong said that he plans to adopt a strategy that emphasizes both “proper regulation” and “promoting development” of the Web3 industry.