Hong Kong-based IDA Finance teams up with Japanese banking group Progmat and other firms to develop a stablecoin-based remittance service between Hong Kong and Japan.
Project Goals and Participants
IDA and Progmat collaborate with Japanese firm Datachain and cross-chain infrastructure provider TOKI to build a proof-of-concept enabling stablecoin cross-border transactions between Hong Kong and Japan. The PoC aims to offer traders an alternative asset for export-import transactions and address regulatory and compliance considerations. IDA will maintain a 1:1 reserve backing for stablecoins, while Progmat will issue the stablecoins and provide the Progmat Coin platform.
Potential Benefits of Stablecoins
The use of stablecoins for cross-border payments offers significant advantages, as stablecoin transactions usually process faster than regular credit transfers and can provide payment confirmation in seconds, making them appealing for commodity trade.
Regulatory Steps in Hong Kong and Japan
Both Hong Kong and Japan have been pushing for more stablecoin regulations to increase adoption. Hong Kong focuses on tokenization and stablecoins, with measures like a stablecoin bill introduced to the legislative council. Meanwhile, Japanese lawmakers push for a crypto reform bill to allow stablecoins to be backed by short-term government bonds and fixed-term deposits.
The joint efforts of IDA Finance, Progmat, and other firms in developing stablecoin remittances between Hong Kong and Japan can significantly accelerate the advancement of cryptocurrency infrastructure, making it more accessible and efficient for international trade.
