As early as the second quarter of 2024, Conflux Network and fintech company AnchorX plan to develop AxHKD, a stablecoin tethered to the Hong Kong dollar. This move follows last week’s establishment of a regulatory sandbox for stablecoin manufacturers by the Hong Kong Monetary Authority (HKMA).
The HKMA’s sandbox assists companies seeking to issue stablecoins in Hong Kong. This follows the HKMA’s consultation on regulating stablecoin issuers on February 29. The Financial Services and Treasury Bureau proposed that stablecoin issuers with fiat currencies obtain HKMA licenses.
Conflux CEO Fan Long voiced confidence in the planned launch timeframe, saying, “We hope they can push it as soon as possible.” If it moves quickly, individuals may be able to obtain them from exchanges in Q2, which is the most likely scenario.” However, he added that the timetable is dependent on the pace of regulatory sandbox work.
The dominating stablecoins, which are tied to the US dollar, have raised concerns among financiers about whether authorities could disconnect local currency pegs. Mr. Alessio Quaglini, CEO of Hong Kong-based Hex Trust, expressed concern about the need for HK dollar stablecoin, saying, “I am also thinking if we really need HK dollar stablecoin.”
The Conflux-AnchorX alliance attempts to meet this future market demand by creating AxHKD, a Hong Kong dollar-backed stablecoin designed to maintain a 1:1 trading band to the Hong Kong dollar, with the entire scheme backed by high-liquidity physical and reserves.
Read also: Conflux Introduces AxHKD, A Hong Kong Dollar-Backed Stablecoin
