Singapore is building a new financial system of "local currency stable currency"

Offline stablecoin payments are gradually becoming a regulated and settleable reality in Singapore. A recent series of commercial and regulatory actions surrounding the Singapore dollar-pegged stablecoin, XSGD, demonstrates industry collaboration from compliance design to implementation. From exchange listing and payment gateway integration to regulatory frameworks and cross-border settlement pathways, Singapore is exploring a new financial system. At the end of September, XSGD was officially included in Coinbase's trading for users in Singapore and globally, marking the first stablecoin pegged to the Singapore dollar and approved by the Singapore regulatory framework to enter circulation on a major centralized exchange. This move not only expands XSGD's accessibility but also means that the stablecoin, priced in local currency, can reach a wider range of investors and payment service users.

XSGD was launched by StraitsX in 2020 and has been circulated on multiple chains such as Ethereum, Polygon, and XRP Ledger; its issuance commitment is 1:1 pegged to the Singapore dollar, and the issuer claims that the corresponding reserves are denominated in Singapore dollars and are held in custody by regulated institutions such as DBS Bank and Standard Chartered. For a long time, on-chain finance has been dominated by US dollar stablecoins for pricing and settlement. StraitsX Co-founder and CEO Liu Tianwei said, "This is not only a major advancement for Singapore, but also a major step forward for the entire virtual asset ecosystem. By enabling users to smoothly and directly access stablecoins pegged to their local currencies, we are breaking down the barriers that have long been limited by the US dollar's dominance in the on-chain foreign exchange market. This collaboration brings us one step closer to a truly multi-currency, barrier-free global financial system." Coinbase Singapore General Manager Hassan Ahmed said that stablecoins are redefining how cross-border payments work, and the launch of XSGD on Coinbase Singapore is another step closer to enabling anyone with a mobile phone and e-wallet to complete local and cross-border payments instantly and conveniently. From Online to Offline Meanwhile, the Singapore dollar stablecoin is moving beyond exchanges and into brick-and-mortar merchants. OKX Singapore has launched OKX Pay, a "stablecoin scan-to-pay" service. Users can use USDC/USDT to scan GrabPay's unified SGQR code within the OKX SG app. Backend collaboration with StraitsX converts USD stablecoins into XSGD, which is then converted into SGD for settlement with merchants, creating a closed-loop system where users can use stablecoins to receive SGD from merchants. This model emphasizes Purpose Bound Money (PBM) and real-time compliance verification, aiming to seamlessly integrate on-chain settlement with existing payment infrastructure (QR and acquiring). A key advantage of this arrangement is that merchants do not need to directly custody or accept crypto assets, while transactions are still denominated and recorded in SGD. Users can pay directly with mainstream stablecoins or their local stablecoin balances. This reduces complexity for consumers and small and micro merchants, and represents a crucial step from "technical feasibility" to "commercial viability" for the stablecoin ecosystem and payment service providers. As early as 2023, the Monetary Authority of Singapore (MAS) finalized the regulatory framework for single-currency pegged stablecoins, explicitly requiring issuers to hold 100% reserves in cash or short-term government bonds in the same currency, and imposing stricter licensing and compliance requirements (including minimum capital and monthly reserve certification) when the circulation volume exceeds 5 million Singapore dollars. Within this regulatory context, StraitsX prioritizes compliance. The company received MAS's in-principle approval/Major Payment Institution license in 2023 and established a separate issuing entity to compliantly issue stablecoins such as XSGD and XUSD. The reserve custody arrangement StraitsX established with traditional banks is a core element of its regulatory recognition and access to mainstream payment networks. When regulators, banks, and technology providers collaborate within regulatory boundaries, the potential for stablecoins to become payment infrastructure increases. According to an ApeX Protocol report, countries were ranked based on recent growth in adoption, percentage of population owning digital assets, internet search activity, and the availability of digital currency ATMs. Singapore received a perfect score of 100, with a projected digital asset ownership rate of 24.4% by 2024, ranking second globally. This represents a significant increase from 11% in 2021. Singapore is deeply involved in the virtual asset sector and continues to have room for growth.