In the current wave of digital currencies sweeping the globe, Singapore is playing an increasingly important role on the global Web3 stage with its unique strategic vision and pragmatic actions. Recently, a series of groundbreaking developments surrounding the Singapore dollar-pegged stablecoin XSGD have not only pushed it into mainstream exchanges but also successfully integrated it into offline payment scenarios, allowing the stablecoin to transition from the blockchain to the real economy. Under a strict and clear regulatory framework, Singapore is quietly building a new financial system centered around local currency stablecoins, aiming to challenge the long-standing dominance of the US dollar in the on-chain payment space and lead a new direction for global Web3 compliance innovation.
I. XSGD Goes Mainstream: The Globalization Process of the Singapore Dollar Stablecoin
As a core component of Singapore's digital finance strategy, the Singapore dollar stablecoin XSGD has recently made significant progress.
Landing on Mainstream Exchanges: At the end of September, XSGD successfully launched on Coinbase Singapore and its global trading platform, marking the entry of the first locally issued currency stablecoin recognized by Singapore's regulatory framework into the circulation of global mainstream centralized exchanges. This move not only greatly enhances the accessibility of XSGD but also means that stablecoins priced in Singapore dollars can reach a broader range of investors and payment service users, laying the foundation for the construction of a multi-currency digital financial system.
Issuer and Reserves: XSGD was launched by StraitsX in 2020 and is circulating on multiple chains including Ethereum, Polygon, and XRP Ledger. Its issuance is committed to a 1:1 peg to the Singapore dollar, with the issuer claiming that the corresponding reserves are denominated in Singapore dollars and are held in custody by regulated institutions such as DBS Bank and Standard Chartered.
Challenging Dollar Dominance: Liu Tianwei, co-founder and CEO of StraitsX, stated that the globalization process of XSGD is "not just a significant advancement for Singapore, but a major step for the entire virtual asset ecosystem." He pointed out that by allowing users to smoothly and directly use stablecoins pegged to local currency, Singapore is breaking down the barriers long dominated by the US dollar that have restricted the on-chain foreign exchange market, moving towards a truly multi-currency and unobstructed global financial system.
II. Offline Payment Revolution: Innovative Models of Stablecoins Integrating into the Real Economy
The innovation of XSGD extends beyond online applications. Singapore is actively promoting the integration of stablecoins into the real economy, with OKX Singapore's OKX Pay service being a prime example.
"Stablecoin QR Code Payment": This innovative "stablecoin QR code payment" feature allows users to directly use USDC/USDT to scan GrabPay's unified SGQR code for payments within the OKX SG App.
Seamless Settlement: In the background, through seamless collaboration with StraitsX, US dollar stablecoins are converted in real-time to XSGD, which is then settled in Singapore dollars to merchants. The highlight of this closed-loop model is that merchants do not need to directly handle or custody crypto assets, yet still receive payments in Singapore dollars, while consumers can conveniently use stablecoins for everyday payments, significantly lowering the barriers for both users and merchants, achieving a critical leap from "technically feasible" to "commercially usable."
Purpose Bound Money (PBM): This model emphasizes "Purpose Bound Money (PBM)" and real-time compliance verification, aiming to seamlessly connect on-chain settlements with existing payment infrastructures (QR, acquiring).
III. MAS Regulatory Framework: A Model for Balancing Innovation and Risk
The Monetary Authority of Singapore (MAS) plays a central role in driving this wave of innovation, with its clear and strict regulatory framework being the cornerstone of XSGD's success.
Clear Regulatory Framework: As early as 2023, MAS took the lead in establishing a regulatory framework for single currency-pegged stablecoins, clearly requiring issuers to hold 100% reserves in the same currency cash or short-term government bonds, and to comply with stricter licensing and compliance requirements, including minimum capital and monthly reserve proof, once the circulation scale exceeds SGD 5 million.
Compliance First: StraitsX, as the issuer of XSGD, has obtained a major payment institution license under MAS's strict regulation and has established reserve custody arrangements with traditional banks such as DBS Bank and Standard Chartered. This model of close cooperation among regulators, banks, and technology providers within the rules provides a solid compliance foundation for stablecoins to become payment infrastructure.
"Precise and Accurate" Regulation: Despite the enthusiastic atmosphere of "crypto brotherhood" culture at large crypto conferences like Token2049, MAS's regulatory strategy remains "precise and accurate." MAS's regulations aim to eradicate speculative, retail-oriented cryptocurrency culture from the domestic market while actively creating a sober institutional environment to attract serious, well-funded global participants.
IV. Singapore's Web3 Ambition: Institutional Finance and Tokenization Leadership
Singapore's ambitions in the Web3 space go far beyond this, as it strives to become a global leader in institutional finance and tokenization.
Institutional Finance: Mr. Darius Sit pointed out that Token2049 is just an annual gathering, and the focus for the remainder of the year is on building institutional finance within a strictly regulated sandbox. MAS is actively convening financial giants to test Real World Asset (RWA) tokenization within the regulatory framework and has successfully tested the tokenization of assets such as foreign exchange and government bonds, with asset management companies also exploring tokenized money market funds.
AI Empowerment: Singapore's blockchain analytics companies are also beginning to use artificial intelligence and advanced algorithms to detect fraud or money laundering on the blockchain. MAS has stated that AI can make the crypto industry faster and smarter, enhancing controls such as fraud detection, compliance monitoring, and tokenization audits.
Talent and Diversity: Gracie Lin, CEO of OKX Singapore, stated that Singapore's securities trading industry has grown, with more professionals (including women) joining, contributing to making it more "institutionalized, standardized, and diverse." She emphasized that Singapore has a unique advantage as a hub for both traditional finance and digital assets, with stablecoins serving as a bridge between the two.
Conclusion:
The successful practice of XSGD, along with Singapore's comprehensive layout in the stablecoin and RWA fields, clearly demonstrates its determination to build a new financial system centered around "local currency stablecoins." By combining advanced technology with trustworthy regulation, Singapore is committed to creating a secure, transparent, and efficient digital asset center. With the widespread application of local currency stablecoins like XSGD and MAS's ongoing exploration in tokenization and AI, Singapore is expected to set a new benchmark for a multi-currency, unobstructed global financial system in the global Web3 wave, solidifying its position as a leader in digital finance in Asia and beyond.
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Original Article: “Singapore's XSGD Stablecoin Debuts on Exchanges, Challenging the Dollar's Dominance”
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