What is FDUSD (First Digital USD)? | A New Stablecoin

FDUSD is a stablecoin introduced in June 2023 by First Digital Limited. It is backed 1:1 by U.S. dollars and held in safe custody by First Digital Trust Limited in separate accounts, and they will make sure the reserves are always in cash or easily convertible assets. While Independent auditors will verify this through an "attestation of reserve" report. Currently FDUSD is available on Ethereum and BNB Chain networks only and plans to expand to other blockchains, offering more options for users looking for stablecoins.

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Cryptocurrencies are better than regular money for some things. Like they're faster, cheaper, and safer. And stablecoin, like FDUSD, id a type of digital money that stays at the same value. Which make it easy to use regular money in the crypto world, making transactions smoother.

FDUSD can be used on different types of usecases like:-

Remittances:- It can be used to send money across borders quickly and without high fees, which is great for sending money to family or friends in other countries.

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Payment Solution:- FDUSD also helps businesses and people make payments with lower fees and faster processing, especially when dealing with international transactions that usually come with extra charges.

Protection Against Volatility:- When the cryptocurrency market gets crazy and prices go up and down a lot, FDUSD can act as a stable and safe option. Investors can change their other cryptocurrencies into FDUSD to protect their money from big price swings.

Usage in Defi:- FDUSD, like other stablecoins, can also be used in different DeFi apps for things like earning interest, borrowing, lending, and staking your crypto.

All cryptocurrency have some sort of risk involved with in it also FDUSD have some risks as well.

Depegging :- The safety of FDUSD depends on the reserves it has to back it up. These reserves can be in different forms, some easy to turn into cash, others not so much. If the issuer can't keep up, FDUSD might not stay stable as promised.

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Operational Error:- FDUSD can also face problems like fraud and cyberattacks. It relies on other services that can have their own issues. If your crypto gets lost or stolen, there may not be a way to get it back.

Regulatory Problem:- The rules for stablecoins like FDUSD are unclear in many places, and they can change fast. This could affect how FDUSD works.

Definitely no doubt that the stable coin are gaining popularity day by day but it is also not a risk free crypto currency and also includes risks like depegging, hacking and regulatory issues. So, as an option we can use to gain stability in crypto gains while the market is volatile but that doesn't mean it is 100% safe, so, it always better to learn before investing money on any crypto.

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