Hong Kong-based First Digital Group launches redeemable USD-backed stablecoin

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First Digital Group, a Hong Kong-based qualified custodian and trust company, announced the launch of its First Digital USD (FDUSD) United States dollar-pegged stablecoin on June 1. The new stablecoin is programmable and described as being capable of executing contracts, escrow services and insurance without intermediaries. It will operate on the BNB Smart Chain.

FDUSD is being issued by First Digital Labs, a subsidiary of digital asset custodian First Digital Trust, which is regulated under the Hong Kong Trustee Ordinance. Under the law, FDUSD will be backed one-for-one with U.S. dollar reserves or highly liquid, high-quality assets held in regulated Asian financial institutions that cannot be commingled with other First Digital assets.

First Digital CEO Vincent Chok said in a statement:

“First Digital is fully committed to regulatory compliance to set a new standard for legitimacy in the space.”

In addition, the company promised “to ensure full compliance with current and future applicable laws and regulations” and “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.”

The stablecoin will be redeemable for U.S. dollars.

Related: First Digital Trust announces $2.15M funding for Asian digital payments service

The launch of the FDUSD coincides with the first day of retail cryptocurrency trading in Hong Kong under new regulatory guidelines, which have led to a rapid uptick of crypto-related activity in the administrative region, with several companies applying to open trading platforms.

In addition, the Hong Kong Monetary Authority launched an e-HKD central bank digital currency pilot project in May with the participation of 16 companies from the financial payment and technology sectors.

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