First Digital USD

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Discover First Digital USD's fundamentals and latest news.

This content was generated by Whalee (BETA), an AI crypto assitant that analyses cryptocurrencies. Informations can be incomplete and/or erroneous. Please always double check and DYOR.

What is First Digital USD?

First Digital USD (FDUSD) is a reserve-backed stablecoin issued by FD121 Limited, a subsidiary of Hong Kong-headquartered financial firm First Digital Limited. It is designed to provide a reliable digital currency that mitigates volatility in the cryptocurrency market by maintaining a stable value pegged to the US dollar at a 1:1 ratio. FDUSD is available on multiple blockchains, including Ethereum and BNB Chain, and is backed by low-risk assets such as short-term U.S. treasury bills, cash, and cash equivalents held in segregated accounts.

How is First Digital USD used?

First Digital USD (FDUSD) is a stablecoin that offers various use cases, primarily focused on providing a stable and reliable alternative to traditional currencies. Here are some of the key ways FDUSD is used:

  • Remittances: FDUSD can be used for fast and cost-efficient cross-border transactions, providing an economical option for remittance services. It offers lower fees and faster processing compared to traditional bank wires or transfers.

  • Payment Solutions: Businesses and individuals can use FDUSD to process payments with lower fees and faster processing. This is particularly valuable for international transactions, which traditional payment methods often charge additional currency conversion and cross-border transfer fees.

  • Hedging against Price Volatility: FDUSD can be used as a hedge and an anchor of stability during periods of volatile price movements in the crypto markets. Investors can convert other crypto into FDUSD to lock in gains or protect their investments from extreme price fluctuations.

  • DeFi Applications: FDUSD can be used throughout various DeFi applications for yield farming, lending, borrowing, and staking, similar to other stablecoins.

These use cases leverage the stability and reliability of FDUSD, which is backed 1:1 by the US dollar, to provide a secure and efficient means of conducting financial transactions and managing risk in the cryptocurrency market.

How do I store First Digital USD?

To store First Digital USD (FDUSD) tokens, you have several options:

  1. Binance Account: You can hold your FDUSD tokens directly in your Binance account, which provides a secure and trusted environment for storing your cryptocurrencies.

  2. Personal Crypto Wallet: You can transfer your FDUSD tokens to a personal crypto wallet, such as Trust Wallet, which supports millions of assets and blockchains. This allows you to manage your tokens independently and securely.

  3. Wigwam Crypto Wallet: Wigwam offers a secure and user-friendly wallet to store, trade, stake, and interact with dApps using your FDUSD tokens. It provides real-time value tracking and allows for direct buying, selling, and exchanging within the wallet.

  1. Metamask Wallet: Metamask is another popular wallet that supports millions of assets and blockchains, making it suitable for storing and trading your FDUSD tokens, especially if you plan to use decentralized exchanges.

  2. Non-Custodial Wallets: You can also use non-custodial wallets like hardware wallets, Web3 wallets, or cold wallets to store your FDUSD tokens. These wallets provide an additional layer of security by keeping your tokens offline and under your direct control.

Regardless of the storage method you choose, it is essential to ensure the security and safety of your tokens by following best practices for wallet management and protection.

How to buy First Digital USD?

To buy First Digital USD (FDUSD) tokens, follow these steps:

  1. Create an Account:

    • Choose a reliable cryptocurrency exchange such as Binance, Coinbase, or KuCoin.
    • Create a free account on the exchange's website or app by providing necessary information, including your email address and a secure password.
    • Complete any required identity verification steps.
  2. Choose a Funding Method:

    • Exchanges offer various payment methods, including:
      • Credit Card or Debit Card: A straightforward method, supported by most exchanges.
      • Bank Deposit: Transfer fiat currency from your bank account to the exchange.
      • P2P Trading: Purchase FDUSD directly from other users on certain exchanges.
      • Third-Party Payment: Utilize third-party payment channels, which may vary by exchange.
  3. Buy FDUSD:

  • Navigate to the exchange's Buy & Sell section.
  • Select First Digital USD (FDUSD) as the cryptocurrency you want to buy.
  • Choose your preferred order type:
    • Market Order: Buy at the current rate.
    • Stop Order: Buy at a specified price.
    • Limit Order: Buy at a specific price or better.
    • TWAP Order: Break down large orders into smaller segments over time.
  1. Transfer to Wallet (Optional):
    • You can hold your FDUSD in your exchange account or transfer it to a personal cryptocurrency wallet like Metamask or Trust Wallet for additional security and flexibility.

Remember to research the exchange's reputation, read user reviews, and compare fees before making a purchase. Additionally, ensure you understand the associated risks and market volatility of investing in cryptocurrencies.

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History of First Digital USD

First Digital USD (FDUSD) is a stablecoin issued by First Digital Trust, a trust company registered under Hong Kong’s Trust Ordinance. This registration ensures compliance with strict regulatory standards, including the maintenance of reserves in segregated accounts. The development team behind FDUSD is committed to transparency and regulatory adherence, which underpins the trust and security in FDUSD’s operations.

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How First Digital USD works

First Digital USD (FDUSD) is a stablecoin that operates on blockchain technology, ensuring secure, transparent, and fast transactions. Here is a detailed overview of how it works:

Issuance and Backing

FDUSD is issued by FD121 Limited, a subsidiary of Hong Kong-headquartered financial firm, First Digital Limited. For every FDUSD token in circulation, there is an equivalent amount of US dollars or assets of equivalent value held in reserves with its appointed custodian, First Digital Trust Limited. This 1:1 backing ensures that the value of FDUSD remains stable and pegged to the US dollar.

Reserve Management

The reserves are held in segregated accounts and are mandated to be in cash or highly liquid assets. This ensures that the reserves are safe and can be easily converted to meet redemption demands. The issuer publishes an "attestation of reserve" report audited by independent auditors to demonstrate the full backing of FDUSD.

Blockchain Networks

FDUSD was initially launched on the Ethereum and BNB Chain networks, with plans to expand to other blockchain networks in the future. This allows for the stablecoin to be used across different platforms and ecosystems.

Use Cases

FDUSD offers various use cases, including:

  • Remittances: FDUSD can be used for fast and cost-efficient cross-border transactions, providing an economical option for remittance services.
  • Payment Solutions: It can be used by businesses and individuals to process payments with lower fees and faster processing.
  • Hedging: FDUSD can be used as a hedge against price volatility in the crypto markets, allowing investors to lock in gains or protect their investments.
  • DeFi Applications: It can be used in various DeFi applications such as yield farming, lending, borrowing, and staking.
Risks

While FDUSD offers stability, it is not without risks. These include:

  • Depegging Risks: The safety and liquidity of the reserve assets are crucial to FDUSD's stability. If the reserves are not sufficient or liquid enough, FDUSD may lose its peg to the US dollar.
  • Operational Risks: FDUSD relies on third-party services such as exchanges and custody services, which are exposed to various operational risks.
  • Regulatory Risks: The regulatory environment for stablecoins is uncertain and evolving, which could impact certain FDUSD operations.
  • Counterparty Risks: The operation of FDUSD involves third-party financial intermediaries, which expose users to counterparty risks.

Overall, FDUSD aims to provide a stable and reliable digital representation of the US dollar, leveraging blockchain technology to enhance the efficiency and security of financial transactions.

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First Digital USD's strengths

First Digital USD (FDUSD) has several strengths that set it apart in the stablecoin market:

  1. Stability: FDUSD is pegged 1:1 to the US dollar, ensuring that its value remains stable and unaffected by the volatility of other cryptocurrencies.

  2. Efficiency: It facilitates fast and cost-effective transactions, making it an attractive option for cross-border remittances and payment solutions.

  3. Programmability: FDUSD is designed to support the execution of financial contracts, escrow, and insurance without intermediaries, enhancing its versatility in the digital finance landscape.

  1. Regulatory Compliance: Issued by First Digital Trust, a trust company registered under Hong Kong’s Trust Ordinance, FDUSD operates under strict regulatory standards, ensuring transparency and security.

  2. Robust Reserve Management: The reserves backing FDUSD are held in segregated accounts and consist of high-quality assets, providing a solid foundation for its stability and trustworthiness.

These strengths position FDUSD as a reliable and efficient digital currency solution, particularly in environments where stability and speed are crucial.

First Digital USD's risks

First Digital USD (FDUSD) is subject to several risks. These include operational risks such as fraud and cyber risks, as it relies on third-party services like exchanges and custody services. Additionally, there are regulatory risks due to the uncertain and rapidly evolving regulatory environment for stablecoins in different jurisdictions.

Another significant risk is the potential depegging of FDUSD from its nominal value. This depends on the safety and liquidity of the reserve assets, which are held in custody by a third-party and can vary from highly liquid to illiquid assets. There is a risk that the issuer may fail to fulfill the claimed stablecoin features, including timely redemption at par.

Furthermore, FDUSD is also exposed to counterparty risks due to its reliance on third-party financial intermediaries, which can lead to delays in redemptions and increased costs.

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Did First Digital USD raise funds?

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First Digital USD’s team

  • Vincent Chok: CEO of First Digital Trust, leading the effort to expand FDUSD usage among decentralized finance (DeFi) users.
  • Gunnar Jaerv: No specific information about his role in the team is provided in the sources.

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