First Hong Kong dollar-backed stablecoin hits crypto exchanges

Bitspark has officially launched Sparkdex.HKD, the world’s first stablecoin “pegged” to the Hong Kong dollar.

The Hong Kong-based startup initially developed its cryptocurrency remittance platform to help the territory’s large numbers of foreign domestic workers wire money back home.

Photo credit: Bitspark

However, big-name tokens such as Bitcoin and Ether have experienced massive price fluctuations, making them largely unattractive to the majority of immigrant workers (for the time being, at least).

Bitspark is the latest crypto startup to opt for stablecoins as a possible solution for this volatility.

Stablecoins are crypto coins that have values directly linked to the price of an underlying “real-world” asset such as gold, another cryptocurrency, or a fiat currency.

Sparkdex.HKD is an example of the last of these, as it is backed by the Hong Kong dollar (which is pegged to the US dollar.)

See: Stablecoins are close to being a real currency, but not quite

Most stablecoins launched so far have been linked to the US dollar, with Tether, TrueUSD, and USD Coin among the most well-known examples.

However, crypto startups have increasingly been turning to other national currencies in order to “stabilize” their tokens.

Last month, the team behind Singapore-based blockchain startup Rate3 unveiled SGDR, the first stablecoin backed by the Singapore dollar. In November, Australian online payments processor Novatti Group began issuing the Novatti AUD Utility Token, which is backed one-for-one by a stash of Australian dollars held in a trust.

Likewise, Sparkdex.HKD is tied to reserves of physical cash in Hong Kong dollars held by Bitspark. The startup said that these reserves will get a regular check-up from an external auditor, with a quarterly report released to the public.

Bitspark said that it began listing Sparkdex.HKD on its Sparkdex exchange, as well as that operated by BitShares on October 31. The token hit a market capitalization of about HK$500,000 (US$63,700) after one month of trading.

Sparkdex.HKD can be integrated into other exchanges, said the startup, which is planning to launch another 179 stablecoins with a focus on serving emerging and frontier markets.