IDA Finance Collaborates with Progmat to Develop Stablecoin Remittance Service

Hong Kong digital asset company, IDA Finance, is teaming up with Progmat, a Japanese banking group, and other firms to develop a stablecoin remittance service between Hong Kong and Japan.

According to a recent press release, IDA and Progmat Inc will collaborate with Japanese blockchain firm Datachain and cross-chain infrastructure provider TOKI to build a proof-of-concept (PoC) that enables stablecoin cross-border transactions between the two regions.

The PoC aims to give traders an alternative asset for export-import transactions using blockchain technology. It will also assess potential improvements to current trade routes and address regulatory and compliance considerations.

Stablecoins are believed to offer significant benefits for cross-border payments, particularly in commodity trade. Transactions involving stablecoins generally take less time to process than regular credit transfers and provide payment confirmation in seconds.

IDA, Progmat, Datachain, and TOKI plan to test the service by facilitating cross-border payment requests using stablecoins denominated in Japanese yen and the Hong Kong dollar through local off-ramp partners.

IDA will maintain a 1:1 reserve backing for the stablecoins, while Progmat will issue the stablecoins and provide the Progmat Coin platform. Datachain is tasked with developing technology needed for cross-border stablecoin exchanges, and TOKI will contribute its cross-chain expertise.

Sean Lee, Co-Founder of IDA, cited data from the Hong Kong Trade Development Council that indicates Japan is Hong Kong’s fifth-largest trading partner.
“With stablecoins emerging as a viable alternative to traditional remittance methods, alongside regulatory clarity from both regions, the potential for growth in this area is enormous,” said Lee.

Recently, both Hong Kong and Japan have pushed for more stablecoin regulations to increase adoption. Christopher Hui, Hong Kong’s Financial Services Secretary, stated that the region is focusing on tokenization and stablecoins as part of its transformation into a crypto hub. He also introduced a stablecoin bill to the legislative council in December 2024.

In Japan, lawmakers continue to advocate for a crypto reform bill that would permit stablecoins to be backed by short-term government bonds and fixed-term deposits, with an upper limit of 50%. This bill is progressing to the National Diet after receiving Cabinet approval.