Hong Kong-based IDA Finance announced that it’s incorporating Chainlink blockchain services into its soon-to-launch HKDA stablecoin, which will be tied to the Hong Kong dollar. In a press release on Oct. 9, IDA Finance explained that this step aims to enhance transparency and strengthen the security of cross-chain transactions for the stablecoin.
A key factor in this partnership is Chainlink’s Proof-of-Reserves (PoR) technology. The technology makes it possible to verify the assets backing HKDA directly on the blockchain. With Chainlink’s PoR, users and investors can easily check the reserves supporting HKDA. Additionally, the PoR offers clear transparency about the assets held by IDA.
Tracking the collateral backing HKDA helps reduce the risk of insufficient reserves. It can also boost trust and security for stablecoins, especially in a volatile market. In addition to Chainlink’s Proof of Reserve (PoR) feature, IDA will incorporate the Oracle provider’s Cross-Chain Interoperability Protocol (CCIP).
HKDA’s role in the crypto space
IDA co-founder and chief strategy officer Sean Lee shared that the integration will make HKDA more accessible by expanding its availability across different blockchain networks. Currently, HKDA can be used on a wide range of platforms with CCIP integration, including decentralized finance (DeFi) systems, exchanges, and payment services, opening up greater opportunities for its use.
Lee explains that the IDA views this as a way to provide “stronger confidence in the stability and backing of HKDA.” Meanwhile, on Sept. 17, Chainlink revealed that East Asia made up nearly 9% of the global cryptocurrency value received between July. 2023 and June. 2024.
Deenar co-founder Maruf Yusupov shared that stablecoins and cryptocurrencies are “slowly taking over” traditional money. Yusupov explained that this shift is due to digital alternatives’ easier access, better usability, and lower costs. He noted that as more people adopt these options, users might move away from traditional banks.
