Hong Kong-based digital asset company IDA Finance has teamed up with Japanese banking group Progmat and other blockchain firms to develop a stablecoin-powered remittance service connecting Hong Kong and Japan.
According to a press release, IDA and Progmat, alongside Japanese blockchain firm Datachain and cross-chain infrastructure provider TOKI, will develop a proof-of-concept (PoC) to facilitate stablecoin transactions between the two regions. The PoC is expected to serve as a testing ground for enhancing trade settlements, improving existing trade routes, and ensuring regulatory compliance.
The collaboration seeks to leverage stablecoins as a faster and more efficient alternative to traditional remittance methods, particularly for commodity trade. Unlike conventional credit transfers, which can take days to process, stablecoin payments can be completed within seconds, offering immediate confirmation and reduced transaction times.
As part of the project, a user will conduct a real-world cross-border payment test, using stablecoins pegged to the Japanese yen and the Hong Kong dollar. IDA will be responsible for maintaining a 1:1 reserve backing for the stablecoins, while Progmat will issue the digital assets through its Progmat Coin platform. Datachain will handle the development of cross-border stablecoin exchange technology, and TOKI will contribute its expertise in cross-chain infrastructure.
Sean Lee, Co-Founder of IDA Finance, highlighted the importance of the initiative, citing 2023 data from the Hong Kong Trade Development Council that ranked Japan as Hong Kong’s fifth-largest trading partner. He emphasized the growing appeal of stablecoins as a viable alternative for international remittances, particularly with regulatory frameworks for digital assets taking shape in both regions.
Hong Kong and Japan have been actively advancing stablecoin regulations to encourage adoption. Hong Kong’s Financial Services Secretary, Christopher Hui, has emphasized the region’s focus on tokenization and stablecoins as part of its broader crypto hub ambitions. In December 2024, Hui introduced a stablecoin bill to the Legislative Council, signaling the government’s commitment to fostering innovation in the sector.
Meanwhile, Japan is moving forward with a crypto reform bill that, if passed, would allow stablecoins to be backed by short-term government bonds and fixed-term deposits, with an upper limit of 50%. The bill, having received Cabinet approval, is now set for review by the country’s legislators.
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