Author: Tiger Research

Key Points

Asian stablecoins continue to grow: some Asia is developing pegs to local currencies stablecoin to maintain monetary sovereignty and reduce global trade’s dependence on the U.S. dollar. These stablecoins increase the efficiency of cross-border payments and align with the financial strategies of countries such as Singapore and Indonesia.

Case studies show: Projects such as XSGD pave the way for the adoption of stablecoins, making transactions faster and cheaper while reducing currency exchange costs . However, challenges remain, such as limited use and market adoption of smaller stablecoins such as XIDR.

Key steps for wider adoption: For stablecoins to reach their full potential, focus on conducting feasibility studies, running pilot projects and establishing a clear regulatory framework . Collaboration between the public and private sectors is critical to overcoming technical, regulatory and operational barriers.

1. Dynamic shifts in stablecoin adoption

Currently, most stablecoins are pegged to the U.S. dollar (USD), reinforcing the U.S. dollar’s ​​dominance in global finance . However, Asia has begun moving towards issuing stablecoins pegged to local currencies. This change is consistent with broader global economic trends, as many countries look to reduce their reliance on the U.S. dollar in trade, investment and financial transactions.

The core question this report attempts to explore is: Why do some Asian countries still issue non-USD stablecoins despite the dominance of the US dollar? To answer this question, we will examine the benefits of stablecoins, highlight key case studies, and explore how non-USD stablecoins are playing an increasingly important role in Asia’s financial landscape.

2. Benefits of Stablecoins

The main motivation for issuing stablecoins is to maintain monetary sovereignty. By pegging stablecoins to their national currencies, countries can ensure that their currencies are aligned with their economic goals. This allows for greater control over the economy and outcomes. Countries can better manage external economic pressures, which is particularly important during periods of foreign exchange market volatility.

Many countries in Asia, especially those that have experienced currency crises, are particularly sensitive to these issues. This makes stablecoins an attractive tool for increasing economic stability and resilience. However, most have prioritized the development of central bank digital currencies (CBDCs) rather than stablecoins issued by private companies.

CBDC provides more direct control over the currency and financial system, making it easier to regulate than private stablecoin alternatives. Currently, only a few are allowed to issue stablecoins. Most are still developing regulatory frameworks and considering implementation.

However, limiting the popularity of U.S. dollar stablecoins such as USDT and USDC is a challenge. It is estimated that about 10% of trade in South Korea is conducted through USD stablecoins, and these transactions are often not recorded in official statistics. Recognizing these practical limitations, countries are accelerating their efforts to enact regulations to help them compete effectively in the global stablecoin market.

3. Case Study: Asian Non-USD Stablecoin Project

3.1. Straits Bank Singapore Dollar (XSGD)

XSGD, issued by StraitsX, is a Singapore dollar-backed stablecoin that runs on Ethereum and expands to 4 other networks. With a market cap of over $18 million, XSGD has quickly become one of Asia’s most trusted stablecoins due to its establishment under the Monetary Authority of Singapore’s (MAS) Payment Services Act.

Users can use XSGD to top up in Grab App. Source: blockhead.co

XSGD enables seamless cross-border transactions in Singapore dollars, benefiting businesses and traders operating in Southeast Asia. In 2024, Singaporean super app Grab allowed users to top up their digital wallets with cryptocurrencies including XSGD, expanding its usefulness for everyday transactions. By using a stablecoin pegged to the Singapore dollar, companies can avoid converting to U.S. dollars, save on conversion fees, and increase transaction speeds.

3.2. Indonesian Rupiah Token (IDRT)

IDRT is issued by PT Rupiah Token Indonesia and is a stable currency linked to the Indonesian Rupiah (IDR). It has a market capitalization of over $4.8 million and runs on networks such as Ethereum and Binance Chain. Although Indonesia does not promote specific stablecoins, it has expressed support for blockchain technology as part of its broader goals to enhance financial inclusion and support the digital economy.

Source: rupiahtoken.com

IDRT is widely used in various CEX and DEX, such as Binance, Uniswap and PancakeSwap, allowing users to trade and invest using currencies pegged to the Indonesian rupiah. This accessibility on popular exchanges expands IDRT’s decentralization capabilities. Finance (DeFi) role in the ecosystem, making it a useful tool for users seeking exposure to Indonesian currencies in the cryptocurrency space

3.3. Straits Times Indonesian Rupiah (XIDR)

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XIDR Ecosystem Source: StraitsX

XIDR is also powered by. Xfers The offering, which is pegged to the Indonesian rupiah, is part of the broader StraitsX ecosystem, which includes XSGD. Although XIDR has a relatively small market capitalization of $124,960, it shows potential for growth, especially in the context of blockchain in Indonesia. With solutions integrated into its financial infrastructure

Compared to IDRT, XIDR has a broader ecosystem and supports multiple DeFi. platform, institutional custody solutions, and a wider range of personal wallet options, which may give it wider utility in various fields such as decentralized finance and institutional trading. Although XIDR is involved in multiple fields, its market capitalization is lower than that of IDRT. This may be because IDRT has established itself earlier in the field. In the future, XIDR may play a key role in the Southeast Asian financial sector, providing fast and efficient payment services to online retailers across the region.

3.4. Indonesian Rupiah Stablecoin. (IDRX)

IDRX, developed by PT IDRX Indo Inovasi, is an Indonesian rupiah-pegged stablecoin that operates on multiple blockchain networks, including Base. Connect traditional finance and Web3 by providing a stable digital representation of Indonesian currency

Source: IDRX

Similar to other stablecoins, IDRX aims to enable decentralized financial applications, facilitate cross-border payments and remittances, and provide stability to hedge against cryptocurrency market fluctuations. Although still in its early stages, IDRX has partnered with Indodax, Indonesia’s largest cryptocurrency exchange by market share. While it is not yet equipped with advanced features such as a fair trading mechanism, the project shows great potential for widespread adoption and feature expansion, thereby strengthening its role in Indonesia’s growing digital economy.

3.5. BiLira Turkish Lira (TRYB)

BiLira (TRYB) is a stablecoin headquartered in Turkey, pegged to the Turkish Lira, and is a currency based on Ethereum. of stablecoins that can provide relevant insights into Asian markets. BiLira, which has a market capitalization of about $34.6 million, operates without direct regulation and is riskier, but fills a gap in cross-border payments involving the Turkish lira. Additionally, TRYB developer BiLira launched its innovative cryptocurrency exchange BiLira Kripto. The platform provides users with more avenues to transact and transact with Turkish Lira-backed stablecoins.

However, given the continued instability of the Turkish lira against the US dollar, 4% of Turkey’s GDP is currently spent on stablecoins. This poses a significant challenge for local stablecoins such as BiLira to compete with dominant currencies such as the US dollar.

3.6. Tether CNHt (RMB)

Tether CNHt is linked to the offshore RMB (CNY) and is a stable currency for corporate international trade. Despite strict regulations on cryptocurrency activities, CNHt allows businesses to settle transactions in yuan without experiencing exchange rate fluctuations, providing a solution for traders who wish to trade in yuan.

However, it is worth noting that Tether CNHt competes with the official digital yuan (also known as e-CNY), which has seen wider adoption in . The digital yuan has been vigorously promoted by , has been integrated into the financial system, and is favored by retail and institutional transactions due to its legal status and the support of the People's Bank of China. In addition, its recent integration with Huawei’s HarmonyOS NEXT operating system greatly improves its accessibility and further solidifies its position in the digital financial ecosystem.

In contrast, Tether CNHt positioningProvide an alternative to USD-pegged stablecoins in offshore markets and international transactions. In terms of usage, digital renminbi is increasingly used for daily transactions, such as retail payments in Beijing and Shanghai. This widespread promotion makes it more popular in mainland China compared to private stablecoin alternatives such as CNHt.

3.7. GMO JPY (GYEN)

GMO JPY (GYEN) is a stablecoin issued by GMO Trust, a regulated entity headquartered in the United States. GYEN is pegged to the Japanese Yen (JPY), runs on Ethereum, and has a market cap of $10 million. Unlike other stablecoins that are primarily aimed at retail or emerging markets, GYEN is designed to serve institutional clients, providing a safer and more regulated alternative for businesses that use Japanese yen to trade. Bitstamp is one of the first CEXs to accept GYEN, marking its move in the crypto industry.

On the legal front, the stablecoin complies with New York State’s strict financial regulations, ensuring high transparency and consumer protection. Although GYEN is not regulated by Japanese law and is not currently allowed for use in Japan, Japan’s positive attitude towards blockchain and fintech development suggests the potential for future regulatory adjustments that may integrate assets such as GYEN into the country’s digital financial ecosystem middle.

4. Main considerations and conclusions 4.1. Main considerations

With growing interest in stablecoins across Asia, countries and companies are exploring the use of these digital currencies practical steps to integrate into its economy. The table below outlines the main use cases, associated benefits and challenges for stablecoin adoption.

The table below highlights the essential elements required for successful stablecoin adoption. Economic sovereignty is a core driver, as stablecoins provide countries with a way to reduce dependence on foreign currencies and increase control over the monetary system. This is particularly important where currencies are volatile or facing external economic pressures.

Regulatory compliance and consumer trust are equally important. A clear framework must be put in place to ensure transparency and prevent abuse, while businesses need to deliver secure, user-friendly systems to earn public trust. Stablecoins also offer a way to improve financial inclusion by extending digital financial tools to underserved populations, especially in areas with limited banking services.

Finally, cross-department collaboration is crucial. , financial technology companies and traditional financial institutionsStrategic partnerships will determine how well stablecoins fit into existing ecosystems. By comprehensively addressing these issues, countries can lay a solid foundation for stablecoin adoption that aligns with their economic and social priorities.

4.2 Conclusion

Stablecoins provide Asia with a unique opportunity to strengthen financial sovereignty, improve currency management and modernize payment systems. By pegging stablecoins to local currencies, digital tools can be created that align with priorities and provide a safe and efficient alternative to traditional systems.

However, stablecoin adoption must follow a structured approach, including rigorous feasibility assessments, pilot programs and a transparent regulatory framework. Through strategic collaboration between public institutions and private enterprises, stablecoins can lay the foundation for sustainable economic growth and innovation. This, in turn, could pave the way for future applications such as cross-border trade and regional cooperation.