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Singapore-based cryptocurrency exchange Huobi is poised to shift its HUSD token to an ERC-20 token via a collaboration with crypto startups Stable Universal Limited and Paxos Trust Company.
As per its press release, Stable Universal will develop a new ERC-20 HUSD token that will be backed by the U.S. dollar and held in reserve by Paxos, a New York State Department of Financial Services (NYDFS)-regulated custodian.
The HUSD token will first be listed on the Huobi Global exchange and integrated into Huobi’s over-the-counter services. Then, the transition from the current HUSD system to the new ERC-20 token will subsequently take effect on other cryptocurrency exchanges, wallets, and platforms in the coming days.
Stable Universal will also allow users to buy HUSD token on a one-for-one basis for U.S. dollars and will coordinate with third parties to carry out smart contract audits and monitor on-chain transactions. According to the announcement, a “top U.S. auditing firm” will conduct monthly attestations to ensure the USD reserves match the HUSD supply.
“We’re excited that Huobi will list HUSD Token, allowing us to build liquidity quickly with massive customer base. Combined with the sterling reputation of Paxos, we are offering a product with the highest level of oversight and protection,” Frank Zhang, Stable Universal CEO, said.
Paxos, on the other hand, is tasked to comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) protocols when opening an account on Stable Universal.
“This is a new model that allows other innovators to create safe, trusted and fully-backed solutions that support wider crypto-market adoption for cash and assets using our unique regulated status,” Richmond Teo, Paxo Co-Founder and Paxos Asia CEO, said.
The latest announcement follows after Huobi has decided to reduce the supply of its own tokens, burning 14,011,700 out of 310,318,300 Huobi Token (HT) in a bid to improve market conditions and increase profits.
Huobi Group also revealed it is jointly working with Nervos, a layered blockchain network, to launch its own public blockchain network focused on decentralized financial (DeFi) services. The proposed Huobi Financial Chain targets businesses, financial institutions, and exchanges to deploy their own blockchain and tokenize assets.
