- Stablecoins is boosting crypto activity in Singapore
- Singapore regulatory clarity builds trust and encourages the introduction of stablecoins
- The risk of bank failures and the instability of traditional financial systems increase interest in cryptocurrencies
The Singapore crypto market is leading the way in the adoption and use of stablecoins, especially XSGD.
Although stablecoins have yet to overtake traditional payment methods, the trend is growing, which is strongly supported by favorable regulations regarding crypto, as well as growing concerns about the stability of the fiat financial system.
What’s the Data on Stablecoins in Singapore?
While traditional payment methods are still gaining ground, showing $56.2B in the second half of last year, so far 75% of transactions with this stablecoin worth up to $1B have taken place in the last two years, with 25% of those transactions being for less than $10,000.
The use of stablecoins is growing, and for example in March Grab added an in-app recharge feature using cryptocurrencies, and the use of crypto scaling on other services.
These proactive measures are also driven by concerns about the fiat financial system and its stability, which Robert Kiyosaki has actively commented on.
He argues that the traditional financial system is extremely vulnerable, especially in a bond market, and also points to the world economy’s reliance on debt, signaling a propensity for eventual collapse. He also pointed out that although bank failures are predictable, we are never prepared for them, and cryptocurrencies can mitigate the next such eventuality.
Regulatory Changes and Growing Confidence in Stablecoins in Singapore
In August 2023, the Monetary Authority of Singapore (MAS) strengthened regulatory requirements for stablecoins by establishing rules on asset custody and segregation and introduced additional measures in April 2024 aimed at better controlling cryptocurrencies.
These changes have boosted confidence in Singapore’s stablecoins, which is reflected in an increase in crypto activity. Singapore’s cryptocurrency activity index rose from 0.39 to 0.8 in early 2024, the highest since 2021.
The approval of Paxos by Singapore’s central bank to issue stablecoins underscores the country’s commitment to creating a transparent and trusted environment for digital finance. The partnership with DBS Bank further strengthens Paxos’ position in the market.
Conclusion
The Asian region has recently been very active in adopting crypto, while for example, Europe can boast rare big steps towards this regarding the same stablecoins.
This once again reminds us that this region deserves separate attention, while all eyes are on the first crypto elections in the United States.
