Last Updated on June 1, 2023 by Bitfinsider

First Digital, a qualified custodian and trust corporation based in Hong Kong, is launching a new stablecoin pegged to the U.S. dollar and regulated in Asia.

First Digital USD, or FDUSD, is intended to be backed one-to-one by one U.S. dollar or asset of equivalent fair value, according to a company statement. The reserves will be held in segregated accounts at Asian institutions.

First Digital stated that the stablecoin is programmable and capable of facilitating the execution of financial contracts, escrow services, and insurance without the need for intermediaries.

“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 shaping their evolution, including the shaping of any regulatory regimes that FDUSD and/or First Digital may fall under in the foreseeable future,” the company said in a statement.

“Stablecoins provide increased stability, a form of remittance, and a hedge against central bank policymakers who seek to influence their domestic currencies,” the report continued.

The announcement is noteworthy, especially in light of the June 1 implementation of new “Guidelines for Virtual Asset Trading Platform Operators” in Hong Kong.

According to the Securities and Futures Commission, the rules outline the safekeeping of assets, the separation of client assets, the avoidance of conflicts of interest, and the implementation of cybersecurity standards.

In the meantime, regulatory uncertainty in the United States is prompting some industry actors to warn U.S. lawmakers that the country could lose its leadership position in the sector as operations are offshored to more accommodating jurisdictions. Hong Kong’s positioning as a new cryptocurrency centre “comes as no surprise,” said Coinbase CEO Brian Armstrong on Tuesday.