Crypto Singapore dollar aims to diversify landscape dominated by USD

Singapore-based payments company Xfers announced on Monday the official release of its XSGD stablecoin, pegged to the Singapore dollar.

The stablecoin would be one of the first SGD-denominated tokens, giving Singapore businesses and individuals a way to transact with crypto backed by their national currency. XSGD is launched on the Zilliqa and Ethereum blockchains. The token is launched as part of Xfers’ StraitsX initiative.

The stablecoin is said to be Travel Rule-compliant, though Aymeric Salley, head of StraitsX, told Cointelegraph that this primarily involves PSN01 guidelines by the Monetary Authority of Singapore.

The set of rules primarily deals with identification requirements for users, who can only acquire or redeem the stablecoin on the Xfers platform after full verification. Continuous risk assessment and transaction monitoring is also required of the platform, though these rules can be seen in many existing anti-money laundering frameworks across the globe.

Salley nevertheless noted that Singapore’s regulations make no distinction between different forms of e-money, which implies that cryptocurrency firms can operate in the country as long as they “can demonstrate compliance with a number of guidelines.”

The token itself can be freely withdrawn and transacted with non-custodial wallets, Salley said.

The initial use cases of XSGD primarily involve financial institutions, specifically cross-border money transfers and financial system access for crypto-based institutions. Head of payments at Xfers Sharon Paul told Cointelegraph:

“Payments are more often than not, the first step in enabling financial access. With this in mind, and observing the rise in tokenised assets, it was a natural progress for our team to include Stablecoins into our suite of payment options. It is with great joy to offer XSGD as an interoperable and hence seamless settlement option for the digital assets and capital markets industries.”

The team is pushing for the coin to be adopted across the DeFi ecosystem as well. It is currently available on Zilswap, a Zilliqa-based decentralized exchange. The token also exists as an ERC-20 contract on Ethereum, which would make inclusion in DEXs like Uniswap possible as well.

Salley highlighted that the stablecoin space is currently dominated by the U.S. dollar, and it is the company’s belief that other currencies should also receive representation:

“We have seen the adoption of stablecoins rise quickly over the years, however, 98% of the market is dominated by USD-denominated stablecoins — we believe that now is the time for stablecoins pegged to other national currencies such as the Singapore Dollar to emerge.”

Singapore’s blockchain ecosystem is relatively vast, comprising over 200 blockchain projects and investment firms alike. The fiat gateway offered by XSGD could let these companies have an easier time interfacing with the global crypto markets, though the country’s crypto infrastructure does not seem particularly underdeveloped. Major exchanges like Binance, Kraken or Coinbase serve the country through either their global platforms, or dedicated subsidiaries.