HongShan Leads $7.8 Million Funding for Hong Kong Fintech Pioneer RD Technologies

In a significant boost for the fintech landscape, RD Technologies, a Hong Kong-based startup founded by the former chief executive of the Hong Kong Monetary Authority, announced on Thursday that it has successfully secured $7.8 million in a Series A1 funding round. The investment was led by HongShan, a venture capital firm helmed by billionaire Neil Shen, formerly known as Sequoia China.

This funding round attracted notable investors specializing in digital assets, including U.S.-based Hivemind Capital Partners and Aptos Labs, a blockchain startup initiated by former Meta employees involved in the ill-fated Diem stablecoin project. Another prominent supporter is the Solana Foundation, a nonprofit organization dedicated to promoting the Solana blockchain.

The newly acquired capital will enable RD Technologies to enhance its platform which aims to merge traditional finance with decentralized finance (DeFi). The startup, tapping into Hong Kong’s ambitions to establish itself as a leading cryptocurrency hub, is also developing stablecoins that are pegged to the Hong Kong dollar and backed by robust reserves of cash.

Rita Liu, CEO of RD Technologies, stated, 'The legacy payment industry is ripe for disruption through blockchain technology and stablecoins, allowing for more efficient and cost-effective cross-border transactions.' She expressed confidence that compliant and transparent stablecoins could rejuvenate the financial landscape in Hong Kong, ultimately positioning the city as a global hub for Web3 innovations. Liu, previously CEO of Alipay's U.K. division, has been steering RD Technologies since her promotion to CEO in February.

Founded in 2020 by Norman Chan, RD Technologies has already made waves with its enterprise-focused mobile wallet that facilitates cross-border payments and foreign exchange among multiple fiat currencies. The startup has previously garnered investments from notable entities including Dragonfly Capital and Hashkey Group, as well as ZhongAn Digital Asset.

RD Technologies earned a spot in the Hong Kong Monetary Authority's trials for stablecoins back in July, where it will experiment with applications like cross-border payments. Other contestants in the trials include Jingdong Coinlink Technology— a subsidiary of JD.com— along with a joint venture among major players like HKT, Animoca Brands, and Standard Chartered Bank.

Despite the potential of stablecoins, the market is often dominated by U.S. dollar-pegged tokens such as Tether's USDT and Circle's USDC, which have historically faced challenges. Notably, the collapse of TerraUSD in 2022 resulted in a monumental $60 billion market plunge when it failed to maintain its dollar peg. Furthermore, this year, USDC briefly lost its peg after facing exposure to the collapsed Silicon Valley Bank, fueling ongoing debates regarding the reliability of stablecoins.

The future appears bright for RD Technologies as it seeks to navigate these turbulent waters of the cryptocurrency world. With strong backing and an innovative vision in place, it is poised to play a pivotal role in shaping Hong Kong's financial future.