Conflux Network, a layer 1 blockchain project based in China, is collaborating with fintech firm AnchorX to launch a Hong Kong dollar-backed stablecoin as early as the second quarter of this year.
Conflux founder and CEO Fan Long told The Block in an interview that the AnchorX team is hoping to launch the “AxHKD” stablecoin as soon as possible.
“We want to be able to move forward as quickly as possible,” Long said. “If it goes quickly, people will probably be able to get it on the exchanges in the second quarter. This is the fastest possibility. But a lot will depend on how quickly the regulatory sandbox moves forward.”
Conflux and AnchorX earlier this month presentation AxHKD’s beta test, designed to maintain a 1:1 peg to the Hong Kong dollar, is “backed by high-quality liquid asset holdings.”
AxHKD, which is initially scheduled to launch on the Conflux public blockchain, will have OKLink Trust as the custodian for stablecoin issuance, according to a statement from the company.
The two men’s plan is to establish the Hong Kong Monetary Authority, the de facto central bank. Regulatory sandbox launched for stablecoin issuers last week. The HKMA said the sandbox could help the government communicate its supervisory expectations to industry players interested in issuing fiat-backed stablecoins in Hong Kong.
The launch of the sandbox comes after authorities concluded a consultation on regulating stablecoin issuers on February 29. In December, the HKMA, the Financial Services Authority and the Treasury jointly Consultation has begun It was proposed that all fiat-referenced stablecoin issuers should obtain a license from the HKMA.
Market demand
With stablecoins pegged to the US dollar dominating the stablecoin market, some industry insiders have questioned the market demand for HKD stablecoins.
“For the Hong Kong dollar (pegged stablecoin), frankly, I don’t even think the Hong Kong dollar needs a stablecoin,” said Alessio Quaglini, CEO and co-founder of Hong Kong-based cryptocurrency custodian Hex Trust. . “I don’t think there’s room for more than one provider.”
Quaglini went on to say that it would be a good idea to bring a stablecoin pegged to HKD to the market. “It’s great to participate in discussions, proof-of-concepts (and) sandboxes,” he added. “But in terms of actual commercial opportunity, I think it’s quite limited.”
However, Vincent Chok, CEO of publisher First Digital, said: FDUSD stablecoin, expressed optimism about market demand. “We know there is very good demand. It’s still a very small market. There is a lot of room for growth, not just for us. But I think there are a lot of new stablecoins coming to the market soon,” Chok told The Block.
Chok said, “I understand that many people are lining up to apply for this Hong Kong stablecoin license,” and added, “As we are preparing to issue Hong Kong dollars, we plan to participate in the sandbox.” -Named stablecoin, aiming to launch by the end of this year.
“There will definitely be demand,” said Conflux’s Long. He has long pointed out that the mainland’s ban on cryptocurrency trading “has made Hong Kong a kind of magnet for all kinds of unmet trading needs.”
It noted that the Hong Kong government’s support for the long-standing cryptocurrency industry “provides additional assurance for the future of all HKD-denominated stablecoins.”
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