Image credit: Hex Trust

‍Disclaimer: This article was originally published on May 21, 2024.

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Hong Kong-based digital asset custodian Hex Trust Group has launched USDX, the first native stablecoin on the Flare blockchain, the company announced on May 21.

Developed by HT Digital Assets, Hex Trust’s tokenization ecosystem, USDX is fully backed by US dollar equivalents — pegged 1:1 to the US dollar. It is primarily backed by short-term United States Treasury Bills, held in custody by regulated financial institutions.

As a native asset on Flare, USDX is designed to integrate with the blockchain’s decentralized finance (DeFi) ecosystem, supporting applications such as lending and borrowing protocols, perpetual futures exchanges, and Flare Labs’ FAsset system.

Hex Trust also partnered with decentralized credit marketplace Clearpool for real-world yields, including USDX and additional Flare (FLR) token rewards. The integration will enable USDX holders to stake their assets in a dedicated T-Pool by Clearpool.

Staked USDX yields cUSDX, which can be used as collateral in Flare Labs’ FAsset system. This system enables the minting of non-smart contract assets like Bitcoin (BTC), Dogecoin (DOGE), and Ripple’s XRP (XRP) into FAssets on Flare, facilitating their use in DeFi applications and cross-chain transfers.

“Stablecoins are fundamental for the development of a vibrant DeFi ecosystem,” Hugo Philion, co-founder of Flare, said. “The collaboration between USDX and Clearpool on Flare delivers a 1:1 backed stable asset with immediate access to real-world yield. This will be particularly useful for FAsset agents, putting their stable collateral to work even while it’s locked in the system.”

Meanwhile, Alessio Quaglini, CEO of Hex Trust, emphasized that USDX aims to combine the stability of traditional finance with the innovative nature of blockchain technology. He believes this approach can lead to reduced volatility in the crypto market, more efficient transactions, and increased confidence in the digital asset ecosystem.

The total market capitalization of the stablecoin market sits at over $160.6 billion, numbers from crypto market data aggregator CoinMarketCap show at the time of writing. Last month, Ripple announced plans to launch its own US dollar-backed stablecoin, with hopes to compete with stablecoin giants Circle and Tether for a slice of the market share.