IDA Finance, a Hong Kong-based digital asset technology company, is integrating Chainlink to enhance transparency for its upcoming HKDA stablecoin.
Chainlink’s blockchain services continue to attract companies amid increasing institutional tokenized asset adoption.
IDA Finance Onboards Chainlink Services for HKDA Stablecoin
The Hong Kong-based fiat-referenced stablecoin issuer is interested in Chainlink’s industry-standard services for tokenized assets. This interest comes as IDA plans an HKDA stablecoin issuance, backed 1:1 by the Hong Kong dollar, Chainlink’s director of communications Chris Barrett confirmed.
Specifically, IDA Finance targets Chainlink Proof of Reserve (PoR) and the Cross-Chain Interoperability Protocol (CCIP). These services will help verify asset collateralization and secure movement of cross-chain data and value, respectively.
Upon launch, and as enabled by Chainlink’s PoR, HKDA stablecoin users would be able to see the reserves that back the stablecoin. Similarly, the CCIP will enable IDA to mobilize the stablecoin across multiple blockchains securely. Taken together, the integration will enhance HKDA stablecoin’s utility and accessibility.
Read more: What is Tokenization on Blockchain?
Ahead of the launch, IDA is reportedly already working with leading financial institutions on the use of HKDA stablecoin as a secure payment vehicle and institutional trading instrument in digital asset markets. Existing partners include banks, traditional and virtual asset exchanges, retail businesses, and real-world asset (RWA) issuers.
“Chainlink is the industry standard for verifying the collateralization of digital assets onchain and moving them cross-chain. [It would provide] our ecosystem partners with enhanced assurances regarding the stability and backing of HKDA. [It would also provide] increased accessibility to HKDA by making it available across various chains,” an excerpt in the press release read, citing IDA co-founder and CSO Sean Lee.
Chainlink PoR and CCIP Inspire Partnerships
Indeed, Chainlink’s industry-standard services for tokenized assets continue to attract traditional finance players. Besides IDA, another player who adopted the services is Taurus, a Swiss cryptocurrency custody and trading firm. As BeInCrypto reported, the Taurus platform will use Chainlink’s offchain data, PoR, and CCIP to accelerate adoption and drive liquidity across multiple blockchain networks.
Similarly, liquid restaking protocol Bedrock integrated Chainlink PoR as a security measure to maintain investor confidence amidst anticipated growth. The decision followed a major exploit on September 26 involving uniBTC. 21.co, the parent company of 21Shares, also integrated Chainlink’s PoR on Solana and Ethereum to increase transparency for its Wrapped Bitcoin 21BTC.
On a stablecoin front, like the case with IDA Finance, Chainlink teamed up with Fireblocks. The collaboration enabled secure and regulated stablecoin issuance for financial institutions worldwide. Additionally, Sony’s Soneium integrated Chainlink’s CCIP as its core infrastructure to support blockchain growth across multiple chains.
These partnerships align with Chainlink CEO Sergey Nazarov’s push for tokenization. He envisions tokenized real-world assets (RWAs) surpassing crypto in value as traditional finance’s (TradFi) interest in DeFi grows. The interest is steered by the ability of tokenization to address challenges, ranging from infrastructure and costs to transactional efficiency, that affect TradFi.
“The ability to tokenize RWAs streamlines transactions and reduces costs. It also enhances market efficiency, making it easier for businesses to manage and trade their assets. This innovation will undoubtedly stimulate the economy and transform the financial space,” IDA’s Lee added.
Read more: Real World Asset (RWA) Backed Tokens Explained
It is worth mentioning that IDA Finance has operational plans for HKDA stablecoin beyond its borders. According to the press release, subsequent phases could see denominations in other US Dollar (USD) pegged currencies.
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