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First Digital USD (FDUSD)
First Digital USD (FDUSD) is a reserve-backed stablecoin issued by a subsidiary of Hong Kong-headquartered financial firm, First Digital Limited. [1][3]
Overview
First Digital USD (FDUSD) was launched on June 1, 2023, by FD121 Limited, a subsidiary of Hong Kong-headquartered financial firm, First Digital Limited. It was launched shortly after the implementation of the “Guiding Principles for Virtual Asset Trading Platform Operators” in Hong Kong. [2]
Following the discontinuation of support for Binance's native stablecoin, BUSD, Binance encouraged users who hold Binance USD (BUSD) stablecoin assets to transition to FDUSD in an official statement issued on September 1, 2023. The move comes as part of Binance’s strategy to gradually phase out its support for BUSD, with plans to conclude the process by February 2024. [7][8]
The value of the FDUSD coin is backed by the US dollar or an equivalent asset representing the fair value of the US dollar at a 1:1 ratio. According to the company, the reserves supporting the FDUSD coin are held in separate accounts at financial institutions in Asia. [4]
The issuer of FDUSD publishes regular attestation reports complied by third-party auditing companies. These reports provide transparency for the FDUSD holders about the reserve status of the stablecoin. [5]
At launch, FDUSD was issued on the Ethereum and BNB Chain networks which follow the ERC20 & BEP20 standards respectively. These decentralized blockchains provide consensus confirmation of transactions using proof of stake (PoS) or proof of staked authority (PoSA) consensus providing immutability of records and public transparency to market participants. [5]
First Digital Limited claims that the FDUSD coin acts as a programmable stablecoin that enables the execution of financial contracts, custody services, and insurance without intermediaries. [5][6]
FDUSD Utility
FDUSD offers remittance by allowing investors to make effective cross-border payments. It serves as a payment solution for businesses and individuals to process payments with efficient processing which is valuable for international transactions. It also allows investors to hedge against price volatility. [6]
First Digital USD (FDUSD)
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REFERENCES
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Binance Initiates Transition Away From BUSD Support, Encourages Users to Embrace FDUSD
Sep 29, 2023