The first public blockchain in China that complies with regulations, Conflux Network, today announced that it played a crucial part in enabling the stablecoin AxHKD, backed by the Hong Kong Dollar (HKD), to complete its beta testing successfully. The stablecoin, created by the local financial startup AnchorX, will first be released on the Conflux Network and then on Ethereum.
Conflux will supply the underlying technology’s superior security, low latency, cost-effectiveness, and scalability. With this launch, AnchorX hopes to establish itself as Asia’s most reputable supplier of digital currency solutions, enabling dependable and effective international trade.
Initially published on the Conflux public blockchain, AxHKD uses strong cybersecurity protocols and cutting-edge distributed ledger technology. The 1:1 peg to the HKD is guaranteed, and reserves of highly liquid assets support it. These reserves are kept by licensed financial institutions in Hong Kong and are safeguarded by a segregated trust arrangement. The custodian services for the AxHKD issue are provided by AnchorX’s strategic partner, OKLink Trust.
AnchorX focuses on two main uses of AxHKD. First, It improves cross-border transactions between Hong Kong/mainland China and the international market by acting as a catalyst for global payments. This is especially advantageous for Belt and Road partners with less developed banking systems. Second, by serving as a trustworthy fiat-on-chain tool for virtual asset trading, AxHKD helps to close the divide between traditional and digital assets in Hong Kong and encourages innovation in real-world asset trading.
Leaders in the blockchain technology and traditional finance sectors support the project, including Hony Capital, one of China’s top investment management companies, managing assets valued at over USD 16 billion.
The declaration comes in response to recent moves by Hong Kong authorities to suggest a set of rules for stablecoin producers. To receive public feedback on the proposed legislation governing stablecoin issuers, the Financial Services and the Treasury Bureau, in collaboration with the Hong Kong Monetary Authority (HKMA), published a Consultation Paper on December 27, 2023. The Discussion study and Conclusion Paper published by the HKMA in January 2022 and January 2023, respectively, are the foundations of this study.
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