Why FDUSD is the Stablecoin You Need to Know About
First Digital USD (FDUSD) has rapidly become one of the top stablecoins, boasting the 4th largest market capitalization and a substantial daily trading volume. As FDUSD climbs the ranks among stablecoins, its applications are capturing the attention of both novice and seasoned crypto enthusiasts. What makes FDUSD a must-know in today’s digital economy?
What is FDUSD?
FDUSD is a fully 1:1 USD-backed stablecoin with uncompromising trust by design, offering integrity, accessibility, and scalability. FDUSD is always redeemable on a one-to-one basis for cash. Reserves are fully backed by highly liquid cash and cash equivalent assets, held in fully segregated bankruptcy-remote holding structures, providing complete peace of mind to investors.
FDUSD’s mission is to combine the benefits of traditional finance with those of decentralised finance, allowing users to have the highest level of trust and flexibility in their transactions. With a team spanning both traditional and decentralised finance, FDUSD is bridging these two worlds to create a more global financial system that better meets everyone’s needs.
How much is 1 FDUSD in South African rands (ZAR)?
As of today, 1 FDUSD = 0.000000 South African Rands (ZAR).
Market data last updated: Oct 9, 2024, 04:59 AM (GMT)
Who is First Digital?
Perhaps one of the most distinguishing features of FDUSD is its issuer. The stablecoin is issued by First Digital Labs (FD121 Limited), a Hong Kong-registered subsidiary of First Digital Group.
While the First Digital Group may not be well known, it has been operating for over five years, and the roots of the company date back over three decades. First Digital Group is a Hong Kong-based company offering global multi-asset custodial, trust, payments, and stablecoin solutions. It was established in 2019 as a spin-off from the Legacy Trust Company to develop new services to support its client base, who were increasingly exploring digital assets as part of their wealth.
Legacy Trust Company is a public company established in 1992 under Hong Kong’s Trustee Ordinance to preserve and manage the assets of institutions, corporations, and high-net-worth individuals.
This unique background provides a solid foundation of trust and reliability, combining decades of experience in asset management with innovative solutions in the digital asset space. First Digital Group was also named one of the leading Emerging Giants of Hong Kong in KPMG and HSBC's 'Emerging Giants in Asia Pacific' Report 2022.
What are the unique features of FDUSD?
Reduced Exposure
FDUSD is issued in Asia, and while the company is exploring different regulatory regimes in Asia and the Middle East, there is notably one which is not currently on its list: the United States.
Having a stablecoin issued and regulated outside the US can reduce the concentration of risk for investors concerned about the volatility of the US financial system. The previous USDC de-pegging event highlighted the potential systemic risks when a large stablecoin is heavily tied to the US banking system.
The regulatory environment in Asia and the UAE, in particular, is generally accepted as being more welcoming and supportive of crypto and stablecoin innovation compared to the more restrictive approach of US regulators. Asian and Emirati regulators are actively developing frameworks to attract crypto companies and enable the growth of stablecoins.
1:1 Asset Redeemability
FDUSD is pegged 1:1 with USD and supported by a reserve of cash and cash-equivalent assets. This means that the value of the total outstanding stablecoins is always matched or exceeded by the value of assets in the fiat reserve. This reserve is verified by an independent third party, with reports issued monthly.
Protections
The fiat reserves are held in a segregated account separate from First Digital’s operational account – kept apart from other assets and protected to ensure the security and stability of FDUSD. This segregation of assets is protected under Hong Kong law. This means that even in the unlikely event that the company goes out of business, FDUSD remains fully redeemable.
Decentralised Finance
As a chain-agnostic stablecoin, FDUSD is designed to operate across various blockchains without the need for conversion. This allows FDUSD to reach a broader audience and integrate with a wider range of decentralised applications and services. FDUSD is also available on leading networks, including Ethereum, BNB Chain, and Sui. Therefore, the opportunity to benefit from future DApps and use cases is significant.
Pro-Regulation
First Digital Group’s CEO, Vincent Chok, has been vocal about being pro-regulation, particularly in how a good regulatory regime can enable stablecoins like FDUSD to co-exist with Central Bank Digital Currencies (CBDCs) and other forms of digital currency. This means that in the future, FDUSD may be interchangeable with traditional finance, giving investors more choice with access to both products in the traditional financial system and innovative DeFi solutions.
How to Buy and Use FDUSD on VALR
From acting as a store of value to facilitating cross-border transfers, FDUSD serves a wide range of use cases in the cryptocurrency space and beyond.
VALR supports FDUSD deposits and withdrawals via the Ethereum network, providing multiple trading options for users. You can buy FDUSD with South African rands (ZAR), purchase Bitcoin (BTC) using FDUSD, or trade FDUSD with Tether (USDT) on VALR’s Spot market.
Once FDUSD is in your VALR wallet, you can take advantage of the VALR Simple Buy/Sell feature to seamlessly trade FDUSD with various cryptocurrencies.
Additionally, VALR Pay allows you to send or receive FDUSD without any network fees, making transfers free for anyone with a mobile phone, email address, or VALR Pay ID. Please note that users need a verified VALR account to use this feature.
Looking to gain exposure to FDUSD?
Common ZAR to FDUSD Conversions
| Amount (ZAR) | FDUSD Amount as of MMM XX, YYYY at HH XM (GMT) |
|---|---|
| 5 | X.XXXXXX |
| 10 | X.XXXXXX |
| 25 | X.XXXXXX |
| 50 | X.XXXXXX |
| 100 | X.XXXXXX |
| 500 | X.XXXXXX |
| 1,000 | X.XXXXXX |
| 5,000 | X.XXXXXX |
| 10,000 | X.XXXXXX |
| 25,000 | X.XXXXXX |
| 50,000 | X.XXXXXX |
Frequently Asked Questions
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FDUSD implements several safety measures. Its reserves are fully backed by highly liquid cash and cash equivalent assets, held in segregated bankruptcy-remote structures. Monthly third-party verifications ensure the integrity of the reserves. Additionally, its issuance outside the US potentially reduces exposure to US financial system volatility.
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As a stablecoin pegged to the US dollar, FDUSD is designed to maintain a stable value of $1. It doesn't have price predictions in the same way other cryptocurrencies might, as its goal is to remain at parity with the US dollar.
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Yes, FDUSD can be traded on various platforms. For example, VALR supports FDUSD trading pairs with South African rands (ZAR), Bitcoin (BTC), and Tether (USDT) on their spot market.
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FDUSD is designed to maintain a stable value of $1 USD. As a stablecoin pegged 1:1 with the US dollar, each FDUSD token should be worth one US dollar.
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FDUSD is designed as a stable store of value rather than an investment for capital gains. Its utility comes from facilitating crypto transactions, cross-border transfers, and providing a stable digital representation of the US dollar. Whether it's suitable for you depends on your specific financial needs and risk tolerance.
Risk Disclosure
Trading or investing in crypto assets is risky and may result in the loss of capital as the value may fluctuate.
VALR (Pty) Ltd is a licensed financial services provider (FSP #53308).
Disclaimer: Views expressed in this article are the personal views of the author and should not form the basis for making investment decisions, nor be construed as a recommendation or advice to engage in investment transactions.
