Stablecoin Transactions In Singapore Reach IDR 15.4 Trillion

Stablecoin transactions in Singapore reached Rp15.4 trillion (Photo; Doc. Ciberseguridadlatam)

JAKARTA - Singapore set a new record in stablecoin transactions, with a value of nearly 1 billion US Dollars or around Rp. 15.4 trillion in the second quarter of 2024. Most of these transactions occurred at merchant locations, according to a report from Chainalysis. The increase in the use of stablecoins highlights the stronger adoption of crypto technology in the business sector due to its efficiency and low transaction costs.

Stablecoins, digital assets whose value is pegged on fiat currencies such as US dollars, were originally used for crypto trading. However, stablecoins also face sharp highlights due to their use in illegal activities. However, stablecoin contributions in total payment transactions are still relatively small when compared to traditional payment methods.

For example, retail payments with cards in Singapore reached 73.2 billion Singapore Dollars (about 56.2 billion US Dollars or Rp866 Trillion) in the second half of 2023. Although conventional payment dominance is still strong, the surge in stablecoin transactions in Singapore in recent months marks a new chapter in the evolution of digital payment technology in the country.

One of the stablecoins that experienced an increase in popularity was XSGD, a token pegged in Singapore dollars. The study showed more than 75% of transactions using XSGD in the third quarter of 2022 until the second quarter of 2024 had a value below 1 million US Dollars (Rp15.4 billion), with nearly 25% of them worth less than 10,000 US Dollars (Rp154 million). This indicates the presence of strong retail activity in the stablecoin sector, in contrast to the more widely used stablecoin US dollars for massive transactions.

The increase in crypto activity also comes amid concerns over the stability of traditional banking systems. Market expert Robert Kiyosaki highlighted the vulnerability in the financial system, especially the increasingly depressed bond market. According to Kiyosaki, global dependence on debt through bonds is a fragile foundation and has the potential to collapse, strengthening interest in crypto as a hedging measure.

The rapid development in stablecoin adoption in Singapore cannot be separated from a clear and firm increase in regulation. In August 2023, the Monetary Authority of Singapore (MAS) introduced new rules for stablecoin publishers, including rules related to customer asset separation and storage. This step was followed by additional regulations in April 2024, which included stricter requirements for crypto and licensing.