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IDA Finance’s use of Chainlink Proof of Reserves and CCIP products aims to boost cross-chain operability and asset security.
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IDA Finance, a Hong Kong-based issuer of digital assets, announced it is integrating Chainlink’s blockchain services into its upcoming HKDA stablecoin, which will be backed by the Hong Kong dollar.
According to an Oct. 9 press release, the move aims to improve transparency and secure cross-chain operations for the fiat-backed stablecoin.
A key part of the collaboration is the implementation of Chainlink’s Proof of Reserves (PoR) technology, which allows onchain verification of assets backing HKDA.
Related: Hong Kong to license more crypto exchanges by end of year
Chainlink PoR enhances stablecoin security
Chainlink’s PoR technology ensures that users and investors can verify the assets backing HKDA, providing greater transparency in the reserve assets maintained by IDA.
Monitoring the collateral behind HKDA helps mitigate the risks associated with insufficient reserves, which can provide stablecoins credibility and security in a volatile market.
Related: Hong Kong to align crypto OTC derivative rules with European standards
IDA taps CCIP for cross-chain operations
Alongside the integration of Chainlink’s PoR, IDA will also integrate the oracle provider’s Cross-Chain Interoperability Protocol (CCIP).
In the release, Sean Lee, co-founder and chief strategy officer at IDA, stated that the integration would increase “accessibility to HKDA by making it available across various chains.”
CCIP integration will enable HKDA to be used across decentralized finance (DeFi) platforms, exchanges and payment systems, allowing it to have a broader market reach.
According to Lee, the IDA views this development as a means to establish “enhanced assurances regarding the stability and backing of HKDA.”
Related: Stablecoins and crypto are threatening fiat money dominance in Eastern Asia
East Asia crypto adoption rising
According to a Sept. 17 report by Chainlink, Eastern Asia accounted for almost 9% of global cryptocurrency value received between July 2023 and June 2024.
Maruf Yusupov, the co-founder of Deenar, a digital stablecoin backed by physical gold, explained to Cointelegraph that stablecoins and crypto are “gradually replacing fiat.”
Yusupov attributed this change to “lower barriers of entry,” improved usability, and the lower cost of these digital alternatives, adding that this continued adoption could see users leaving traditional banks.
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This article first appeared at Cointelegraph.com News
