Conflux Network and AnchorX to Launch Hong Kong Dollar-Backed Stablecoin
Conflux Network, a Layer 1 blockchain project based in China, has partnered with fintech firm AnchorX to launch a stablecoin backed by the Hong Kong dollar. The stablecoin, called AxHKD, is set to be launched in the second quarter of this year. Conflux founder and CEO, Fan Long, expressed hope that the launch will happen as soon as possible, pending regulatory approval.
AxHKD Stablecoin Beta Testing
In an announcement earlier this month, Conflux and AnchorX revealed that they were beta testing AxHKD. The stablecoin is designed to maintain a 1:1 peg with the Hong Kong dollar and will be backed by high-quality liquid asset reserves. OKLink Trust will act as the custodian for the stablecoin issuance.
Hong Kong’s Regulatory Sandbox
The launch of AxHKD comes as the Hong Kong Monetary Authority (HKMA) introduces a regulatory sandbox for stablecoin issuers. The sandbox aims to provide guidance to industry players interested in issuing fiat-referenced stablecoins in Hong Kong. This move follows a consultation held by the HKMA and the Financial Services and Treasury Bureau, which proposed licensing requirements for stablecoin issuers.
Market Demand for HKD Stablecoins
While U.S. dollar-pegged stablecoins dominate the market, there have been questions about the demand for an HKD stablecoin. Some industry players believe that there is limited commercial opportunity for such a stablecoin in Hong Kong. Alessio Quaglini, CEO of crypto custodian Hex Trust, stated that he doesn’t think there is space for more than one provider, if any.
However, Vincent Chok, CEO of First Digital, the issuer of FDUSD stablecoin, expressed optimism about market demand. Chok believes there is a good demand for HKD stablecoins and expects the market to grow with the introduction of new stablecoins. Conflux’s Fan Long also believes there will be demand for AxHKD, as Hong Kong attracts trading needs that are not satisfied due to the crypto trading ban on the mainland.
Conclusion
Conflux Network and AnchorX are working together to launch AxHKD, a Hong Kong dollar-backed stablecoin. The launch is expected to happen in the second quarter of this year, pending regulatory approval. With the introduction of a regulatory sandbox for stablecoin issuers by the HKMA, there is growing support for fiat-referenced stablecoins in Hong Kong. While some industry players question the market demand for an HKD stablecoin, others remain optimistic about its potential. The launch of AxHKD will provide further insight into the viability and acceptance of HKD stablecoins in the market.
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