Bitspark, a decentralized cryptocurrency platform has launched a stablecoin that is reportedly backed by the Hong Kong Dollar (HKD). The virtual currency is named Sparkdex.HKD and it has been listed on Bitspark’s exchange, reports a media outlet on January 29.
First Stable Coin Tied to the HongKong Dollars
Per the report, Bitspark has launched the first stablecoin that is backed by the Hong Kong Dollar. Sparkdex.HKD’s collateral is stored as physical cash in a reserve that will be audited on a regular basis. Also, a local audit firm is responsible for checking the reserve in order to ascertain if the amount held corresponds with the coin’s circulating supply.
While commenting on the development, George Harrap, Co-Founder, and CEO of Bitspark said that most stablecoins in the market are backed by the dollar. However, their launch of an HKD pegged digital currency will encourage the development of stablecoins that are tied to other national currencies.
The CEO also said:
We are proud to have pioneered this landmark first for both the cryptocurrency and traditional finance industry, and anticipate that this will lead the way for much-needed diversity among other currencies within the stablecoin sector
Sparkdex.HKD Has Been Listed on Bitspark’s Trading Platform
On the other hand, further reports reveal that Sparkdex.HKD is already tradeable on Bitspark’s decentralized exchange, DEX. In the same vein, the coin’s market capitalization after a month of its listing was approximately $500,000 HKD.
Stablecoins are generally known to have a more stable price than other cryptocurrencies. Some examples are Tether, Gemini, TrueUSD, and nUSD. Each of these, are either tied to an asset, commodity or a virtual currency which serves as its collateral. Thus, this sets Sparkdex.HKD apart from major stablecoins in the market that are pegged to the dollars.
Stablecoins Have Gained Popularity
BTCNN on January 27 informed on Bloomberg’s report which reveals that stablecoins have gained popularity since their launch in 2015. This popularity was attributed to their less volatile nature which helps them to maintain their price. The same can be said when Bitcoin’s dump and hike in price influences others, but theirs is still maintained.
Nonetheless, the disadvantages of using this type of digital assets were also outlined. Here, the fiat currency held in reserve could be fictional and as such, customers may be led to believe in a non-existent reserve. In the same vein, financial regulators could also require their registration in a country or impose a ban on their trade within a region.