Flare and Red Date Technology are currently running trials in Hong Kong to enable mainland Chinese residents to purchase stablecoins issued by IDA through anonymous registration and compliance with Chinese real-name laws. This initiative utilizes the China Real-Name Decentralized Identifier System (RealDID) to facilitate legal transactions with stablecoins like HKDA, in line with Hong Kong’s new stablecoin regulations. It is worth noting that major stablecoins such as Tether and Circle’s U.S. dollar stablecoins are not part of these trials.
The trials announced by Layer-1 blockchain Flare and decentralized cloud infrastructure company Red Date Technology aim to provide opportunities for mainland Chinese residents to engage with stablecoins in Hong Kong. The first trial allows for anonymous registration on a regulated stablecoin app, while the other trial enables the purchase of tokenized financial products using the stablecoin. This move comes as Hong Kong prepares to introduce new stablecoin regulations that will permit digital currencies on public blockchains.
China has traditionally taken a strict stance against cryptocurrency trading by its residents, but the country has been actively investing in blockchain technology. While crypto trading is popular among individuals, state-backed projects in China tend to focus more on B2B and corporate applications. Permissioned blockchains are favored over permissionless ones, and NFT projects are encouraged to be used for collecting rather than speculation.
The trials in Hong Kong will leverage the China Real-Name Decentralized Identifier System (RealDID) for anonymous registration. RealDID is a blockchain-based ID system launched in China in December last year and is overseen by the Blockchain-based Service Network, which is supported by Red Date Technology and the Ministry of Public Security’s First Research Institute. By using RealDID, users can maintain anonymity from companies and platforms while still complying with Chinese real-name registration requirements. In Hong Kong, individuals will be able to access stablecoins and token-based financial products without the need to provide passports or bank statements.
It is important to note that major stablecoins like Tether and Circle’s U.S. dollar stablecoins are not expected to be part of these trials. This development reflects a significant step towards aligning with China’s broader strategy of integrating blockchain technology into its ecosystem.
Overall, the trials conducted by Flare and Red Date Technology in Hong Kong represent a progressive move towards enabling mainland Chinese residents to legally interact with stablecoins in compliance with Chinese laws. As the cryptocurrency industry continues to evolve, initiatives like these play a crucial role in bridging the gap between regulatory requirements and technological advancements in the space.
