Huobi believes its upcoming blockchain will provide financial institutions with a framework for decentralized finance (DeFi) applications and services.
The Singapore-based cryptocurrency exchange announced Saturday its proprietary network, Huobi Chain, had been successfully deployed on its testnet. Developed in collaboration with layer-1 protocol provider Nervos, Huobi said its new blockchain will allow businesses and regulators to determine the rules of the road for the emerging DeFi space.
“With Huobi Chain, we want to provide the decentralized framework that facilitates industry-wide collaboration, which is critical to the widespread adoption of DeFi,” said Ciara Sun, Huobi vice president for global business.
Entities in the financial services sector, including banks, will be able to use Huobi Chain to develop DeFi applications that have anti-money laundering (AML) and know-your-customer (KYC) compliance baked into the chain itself, the exchange said.
A Huobi spokesperson told CoinDesk the firm hasn’t yet entered talks with banks or other financial institutions, although that’s part of the plan once Huobi Chain has successfully passed the public beta phase.
The technology would allow regulators to maintain oversight of the distributed ledger through Huobi Chain’s delegated proof-of-consensus (DPOS) algorithm. A decentralized identification system (DID) allows users to create identity profiles that can be accepted and verified by regulators in multiple jurisdictions.
The exchange is eyeing use cases for its tech across areas such as tokenized asset issuance, payments, identity verification and lending.
Although Huobi Chain will support multiple cryptocurrencies such as bitcoin (BTC) and ether (ETH), the exchange’s native Huobi Token will be the protocol’s sole utility token. Support for other types of digital assets will be added over time, the exchange said.
Huobi Chain’s mainnet launch is expected to take place later this year.