Crypto exchange Huobi to launch its own public blockchain for decentralized financial services
Singapore-based cryptocurrency exchange Huobi is set to launch its own public blockchain network focused on decentralized financial (DeFi) services, following the lead of rival Binance.
Huobi has partnered with blockchain startup Nervos for the initiative, it announced Monday. Together, they will build “FinanceChain,” which will allow financial firms and exchanges to deploy their own blockchains, tokenize assets and offer DeFi services. FinanceChain will also support hosting of lending services, stablecoins, security token offerings (STOs) and decentralized exchanges (DEXs), as well as payment services, according to the announcement.
“More and more assets are being tokenized and moved to the digital world, including both native cryptocurrencies and traditional physical assets,” said Kevin Wang, co-founder of Nervos, which is backed by notable investors, including China Merchant Bank, Polychain Capital and Sequoia China.
The announcement follows a similar development at the world’s largest cryptocurrency exchange, Binance. The exchange recently launched its own public blockchain network called Binance Chain, aiming to facilitate faster token issuance and simple asset transfer.
Still, Huobi appears to be directly targeting Wall Street-like firms with its initiative.
“The financial industry is now at an inflection point, and together with Huobi, we’re well positioned to help it modernize its services for the decentralized future,” Wang said.
FinanceChain is expected to open source in Q3 this year, with testnet launch scheduled in Q1 of 2020 and mainnet launch in Q2 of 2020, per the announcement. It will also support decentralized identifier (DID) and implement Know Your Customer (KYC) tools to meet Anti-Money Laundering (AML) requirements to ensure regulatory compliance, Huobi said, adding that regulators will also be able to join the network as validators.
“Mainstream blockchain systems (such as BTC, ETH, EOS, etc.) lack comprehensive support for regulation and compliance, limiting their use in the compliance market,” said Leon Li Lin, Huobi’s founder and CEO, in a separate blog post on Sunday.
Earlier this year, investment banking giant JPMorgan also launched its own crypto-like token called JPM Coin, aiming to speed up payments and trade settlements. “We believe that a lot of securities over time, in five to 20 years, will increasingly become digital or get tokenized,” Umar Farooq, JP Morgan’s head of digital treasury services and blockchain, said last week.
Goldman Sachs CEO David Solomon also recently said that the bank could “absolutely” play a role in cryptocurrency disruption and hinted it might be interested in issuing a digital asset similar to JPM Coin in the future.