What is First Digital USD (FDUSD)? Information, History and Analysis

At the end of July 2023, Binance included a new stablecoin called First Digital USD (FDUSD) to its list.

So, what is First Digital USD (FDUSD)? Let’s explore this potential alternative to BUSD on the world’s largest crypto exchange through the following article with AZCoin.

What is FDUSD?

A stablecoin issued by FD121 Limited
A stablecoin issued by FD121 Limited

First Digital USD (FDUSD) is a stablecoin issued by FD121 Limited under the brand First Digital Labs in Hong Kong. It promotes itself as a reliable and attractive cryptocurrency solution for investors and businesses.

This type of stablecoin is pegged to the USD at a ratio of 1:1, ensuring that each FDUSD token is always backed by an equivalent value of USD in the reserve fund.

First Digital states that fiat backing helps FDUSD minimize volatility in the cryptocurrency market, attracting interest and building trust with users. Additionally, its high efficiency improves financial transaction performance, reduces transaction costs, and safely increases speed and accuracy, enhancing convenience and reducing risks in the trading process.

A notable strength of FDUSD is its programmability, allowing for the deployment of financial contracts, money holding services, and insurance without intermediaries. This optimizes transactions and creates favorable conditions for users in financial processes.

Key benefits of FDUSD

Transfer Stablecoins enable fast and cost-effective cross-border transactions
Transfer Stablecoins enable fast and cost-effective cross-border transactions

FDUSD, like many other stablecoins, offers various opportunities in both the financial and technological sectors due to its stability and digital nature.

International money transfer Stablecoins enable fast and cost-effective cross-border transactions, making them an attractive option for remittance services. Using stablecoins minimizes fees and waiting times associated with traditional money transfer methods:

  • Payment solution: Businesses and retailers can use stablecoins to process payments without significant transaction fees or waiting times. This is particularly useful for e-commerce and international transactions.
  • DeFi: Decentralized Finance FDUSD can provide stability for yield farming platforms, lending, and borrowing in a decentralized financial environment. Users can lend or stake their stablecoin to earn interest or participate in liquidity mining programs.
  • Intermediary services and smart contracts: FDUSD can be used as a means of payment in smart contracts or as collateral in escrow services, providing more predictability and stability compared to volatile cryptocurrencies.
  • Ensuring protection against price fluctuations: traders and investors can use FDUSD as a safe haven during periods of high market volatility. By converting their volatile cryptocurrencies into FDUSD, they can temporarily safeguard their investments from unforeseen price fluctuations.
  • Including financial services: FDUSD can be utilized in areas with underdeveloped financial infrastructure, providing access and interaction with basic financial services such as savings, loans, and insurance products. This could help bring financial stability and security to individuals and businesses who have limited access to traditional banking services.

Basic information about the stablecoin FDUSD

Basic information about the stablecoin FDUSD
Basic information about the stablecoin FDUSD
  • Token Name: First Digital USD
  • Token: FDUSD
  • Blockchain: Ethereum
  • Token Standard: ERC20
  • Contract Address: 0xc5f0f7b66764f6ec8c8dff7ba683102295e16409
  • Token Utility: Stablecoin
  • Total Supply: 154,532,228 FDUSD
  • Circulating Supply: 154,452,355 FDUSD

Investing in First Digital USD carries risks

Issuers of stablecoins with asset backing need to ensure strong asset reserve management to build trust, maintain price stability, and prevent a bank run scenario that could spread to the financial industry.

Similar to Money Market Funds (MMFs), the liquidity of stablecoin reserves is essential to allow users to exchange stablecoins for fiat currency.

Careful management of asset reserves is the foundation of user trust in stablecoins. Loss of trust can trigger large withdrawal requests leading to liquidation of asset reserves with negative repercussions to the financial system.

To minimize risk when investing, make sure to review the Evaluation Process on our website.

Why does Binance want to support FDUSD?

Reason Binance want to support FDUSD
Reason Binance want to support FDUSD

Binance listed the stablecoin FDUSD and offered free trading incentives, sparking speculation about its popularity.

Launchpool and Launchpad projects by Binance aim to support FDUSD and BNB, encouraging users to hold these tokens.

The exchange introduced new projects in 2023, generating demand for BNB, TUSD, and FDUSD. Binance may use these initiatives to stabilize BNB’s value amidst legal challenges and rumors, as well as to attract users to hold more BNB and FDUSD.

Liquidation risk exists if BNB price falls below 220.

If you are looking to trade bitcoin on Binance, you can check out reviews and benefits of joining the best crypto exchanges 2024 by signing up at AZCoin.

Frequently Asked Questions about FDUSD

Who created FDUSD?

FDUSD is issued and managed by First Digital.

Is FDUSD safe?

According to the project, FDUSD is pegged to the ratio of 1:1 with USD and is backed by financial institutions under the control of First Digital, allowing owners to redeem at any time.

Which blockchains does FDUSD exist on?

As of now, FDUSD is issued on two chains, BNB Chain and Ethereum Chain, corresponding to the BEP20 and ERC20 token standards.

How long does it take to transfer FDUSD?

The time it takes to transfer FDUSD is not constant, as it relies on two factors: the efficiency of the blockchain platform where FDUSD is created and the sequence in which transactions are processed.

Which trading pairs involve FDUSD?

As announced, FDUSD is currently being traded in pairs with other tokens such as FDUSD/USDT, FDUSD/BUSD, BNB/FDUSD, USD/TFDUSD.

In summary

First Digital USD is a promising stable coin with the potential to become a risk management tool for various financial transactions. However, as with any cryptocurrency, users need to be cautious and conduct thorough research before using FDUSD or any other type of cryptocurrency to avoid potential risks.

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