- FDUSD is the new stablecoin by First Digital Group.
- Binance listed the coin, aiming to start trading on July 26.
- The stablecoin market is shrinking for over a year.
YEREVAN (CoinChapter.com) – Binance listed the new stablecoin FDUSD, introduced by Hong Kong-based First Digital Group in early June 2023. The announcement stated that Ethereum and Binance Smart Chain-based stablecoin trading will start at 08 am UTC on July 26.
Binance also introduced a “zero maker fee” promotion for the stablecoin. “Standard maker fees will apply after the promotion ends,” added Binance.
As mentioned, the reserves of FDUSD are held by First Digital Trust Limited. The company raised $25 million in series A funding, led by VC investment firms Kenetic and Nogle.
In October 2022, company co-founder Gunnar Jaerv announced that First Digital “successfully completed” its clean SOC 1 [System Organization and Controls] and SOC2 Type 1 report “in accordance with attestation standards established by the American Institute of Certified Public Accountants (AICPA).”
For reference, SOC 1 is a measure of the reliability and accuracy of an organization’s financial reporting. SOC 2 is an auditing procedure that tests an organization’s efficacy against five “trust service principles”: Privacy, Availability, Confidentiality, Processing Integrity, and Security.
Also, First Digital claims to have backed FDUSD with cash reserves, a claim that traders could not blindly trust in the crypto community. Notably, the reserves are not yet specified by any financial report.
First Digital’s co-founder and CEO, Vincent Chok, mentioned that the launch of the stablecoin represents a “major stride forward” for the company. He also mentioned that FDUSD could be “seamlessly integrated into everyday transactions,” another common claim in the digital asset sector.
The stablecoin market is shrinking for 16 months straight
Meanwhile, another stablecoin launch comes at a difficult time for the whole asset class. The stablecoin market has been shrinking for 16 months straight, dropping to $125 billion on July 26.
Stabelcoin Statistics report from CoinGecko, published in mid-July, states that the stablecoin market shaved nearly $30 billion off its valuation throughout 2022. The total stablecoins market cap started the year at nearly $168 billion on January 1, 2022, and ended at $138.4 billion on January 31, 2023. The $29.5 billion contraction represents an over 17.5% decline in the total market cap.
However, Despite the total crypto market cap shrinking by $1.2 trillion year-on-year (YoY), stablecoins grew in dominance by 5.6 percentage points (pp). Moreover, the report confirmed that Tether’s USDT remains the most commonly-owned stablecoin, with over 80% of the respondents.
Another report by FitchRatings concurred, stating additional details on USDT and Circle’s USDC, which suffered a de-pegging incident in Q:
Despite the recovery of its peg, USDC’s market capitalization still fell by over 25% in Q1 2023 and remains depressed. By contrast, Tether’s USDT market capitalization rose by 12% over the same period, capturing about 72% of USDC’s redemption volume, and this trend has continued in Q2 2023.
read the report.
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