Layer 1 Flare and Red Date Technology Set to Trial Stablecoin Buying for Chinese Nationals in Hong Kong

As a seasoned crypto investor with a decade of experience navigating the ever-changing landscape of digital assets, I find the recent announcement of these trials by Flare and Red Date Technology particularly intriguing. Having witnessed China’s cautious yet progressive approach towards blockchain technology, it’s exciting to see a potential opening for mainland Chinese residents to legally participate in public chain wallet transactions using stablecoins.

Red Date Technology, a blockchain firm based in China, and Flare, a blockchain platform, have revealed plans for two tests enabling mainland Chinese citizens to purchase stablecoins from IDA, a virtual asset company situated in Hong Kong.

In the initial phase, users can register anonymously on a secure, regulated app that deals with stablecoins, while in another phase, these stablecoins will enable the purchasing of various tokenized financial assets.

As Hong Kong is about to unveil new rules for stablecoins that can operate on public blockchains, this trial of a KYC (Know Your Customer) solution offers Mainland China residents their initial legal chance to possess wallets linked to public chains and exchange stablecoins like HKDA, a Hong Kong Dollar-referenced stablecoin issued by IDA. This initiative could mark the beginning of efforts to harmonize with China’s long-term strategy for incorporating blockchain technology,” the companies stated in a release.

China takes a firm approach toward its citizens engaging in cryptocurrency transactions, but it’s been quite active in investing in blockchain technology. Even though crypto trading is popular, state-supported initiatives generally prioritize B2B and corporate applications over individual use. In contrast to open, public blockchains, those in China are usually controlled (permissioned) rather than decentralized (permissionless). Notably, even NFT projects—including ones originating from local museums—have been advised to concentrate on collection rather than speculation.

As a researcher, I’m excited to delve into the upcoming trials in Hong Kong, where we’ll be utilizing the China Real-Name Decentralized Identifier System (RealDID) for anonymous registration. This system, based on blockchain technology, was launched in China late last year and is managed by the Blockchain-based Service Network, supported by Red Date Technology, and the Ministry of Public Security’s First Research Institute.

As a crypto investor, I appreciate the anonymity that RealDID offers me in the digital world while ensuring I’m compliant with Chinese law. This innovative solution allows me to keep my identity hidden from companies and platforms, yet adhere to real-name registration requirements set by China. Plus, in Hong Kong, I can effortlessly access stablecoins and other financial products tied to tokens without having to reveal sensitive information like passports or bank statements.

It seems like the main stablecoins, including Tether and Circle’s US dollar-backed stablecoins, won’t be accessible.