IDA Finance, a Hong Kong-based issuer of digital assets, said it is integrating Chainlink’s blockchain services into its upcoming HKDA stablecoin, which will be backed by the Hong Kong dollar.
According to an Oct. 9 news release, the move aims to improve transparency and secure cross-chain operations for the fiat-backed stablecoin.
A vital part of the collaboration is the implementation of Chainlink’s Proof-of-Reserves (PoR) technology, which allows onchain verification of assets backing HKDA.
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Chainlink PoR enhances stablecoin security
Chainlink’s PoR technology ensures that users and investors can verify the assets backing HKDA, providing transparency regarding the reserve assets maintained by IDA.
Monitoring the collateral behind HKDA helps mitigate the risks of insufficient reserves and can provide credibility and security for stablecoins in a volatile market.
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IDA taps CCIP for cross-chain operations
Alongside the integration of Chainlink’s PoR, IDA will also integrate the oracle provider’s Cross-Chain Interoperability Protocol (CCIP).
In the release, Sean Lee, co-founder and chief strategy officer at IDA, said that the integration would increase “accessibility to HKDA by making it available across various chains.”
CCIP integration will enable HKDA to be used across decentralized finance (DeFi) platforms, exchanges and payment systems, giving it a broader market reach.
According to Lee, IDA views this as a means to establish “enhanced assurances regarding the stability and backing of HKDA.”
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East Asia crypto adoption rising
According to a Sept. 17 report by Chainlink, East Asia accounted for almost 9% of global cryptocurrency value received between July 2023 and June 2024.
Maruf Yusupov, the co-founder of Deenar, a digital stablecoin backed by physical gold, told Cointelegraph that stablecoins and crypto are “gradually replacing fiat.”
Yusupov attributed this change to “lower barriers of entry,” improved usability and the lower cost of these digital alternatives, adding that this continued adoption may see users leaving traditional banks.
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