A top name in the Chinese e-commerce industry, JD.com has declared its intention to release the Hong Kong Dollar (HKD) stablecoin.
JD.com, one of the significant e-commerce groups in China, has proposed the issuance of the first-ever stablecoin that is 1:1 pegged to the Hong Kong Dollar (HKD) on a public blockchain. Stablecoins will be supported by reserve assets that are both credible and highly liquid.
JD Coinlink, the company’s Hong Kong subsidiary, will introduce the HKD stablecoin. On July 18, the Hong Kong Monetary Authority (HKMA) designated the firm as one of three companies for its stablecoin sandbox program.
The HKD Stablecoin’s Usage and Accessibility
Following the launch of the HKD stablecoin, institutional and retail traders can access virtual assets on public blockchains, including Binance Smart Chain (BSC), Ethereum, and TRON (TRC20). Nevertheless, the organization must still determine its preferred blockchain for the launch.
The HKD stablecoin is intended to offer enterprises “secure, cost-effective, and efficient payment solutions,” according to the company. Merchants and businesses may utilize stablecoins to settle transactions for products and services.
JD Coinlink clarified on its official website that, even though it issued the first HKD stablecoins, it is not a licensed stablecoin issuer. The firm also stated that it does not endorse or support digital assets, as they may still be impacted by market volatility, as evidenced by the history of TerraUST.
Nevertheless, it will guarantee that the stablecoins adhere to the current regulatory framework in Hong Kong. To ensure complete adherence to current or forthcoming regulations, the organization intends to collaborate with regulatory authorities outside its jurisdiction.
Conducting routine audits
JD Coinlink declared that it will not serve as the primary custodian of the stablecoin. The funds will be stored in the company’s independent accounts of licensed financial institutions after the digital assets are introduced.
The firm intends to conduct various audits and regularly verify the reserves to guarantee that the assets are wholly backed 1:1, as Hong Kong’s new stablecoin regime requires. The proposed legislation mandates that the par value of stablecoins in circulation must always be equivalent to that of stablecoins issued in Hong Kong.
The Crypto-Friendly Environment of Hong Kong
Furthermore, Hong Kong is one of the most crypto-friendly nations in the world, with a comprehensive regulatory framework that governs the issuance and utilization of digital assets.
The Asian nation implemented a new licensing regime in June 2023, which opened its borders to crypto exchanges last year. The country is home to organizations such as OSL Digital Securities Limited (OSL) and HashKey Exchange.
CSOP Asset Management, a prominent financial investment company in China, introduced its first Bitcoin futures inverse product to the country on Tuesday.
Hong Kong has also made substantial strides in its pursuit of becoming a prominent financial center in Asia. For the second year, the nation was acknowledged as the most well-prepared for cryptocurrency adoption in September 2023. The country outperformed Switzerland and the United States, with a crypto readiness rating 8.36.