# Rise of Stablecoins in Asia Reduces Dollar Dependence
Major Asian countries are developing national currency-based stablecoins to reduce reliance on the U.S. dollar in global trade and bolster monetary sovereignty. This move aims to enhance cross-border payment efficiency and aligns with the financial strategies of countries like Singapore and Indonesia.
# Key Case Studies
Projects like XSGD are leading the way, demonstrating improved transaction speeds and cost savings with the implementation of stablecoins. Smaller stablecoins such as XIDR exhibit limited usability and market adoption.
# Future Challenges
For national stablecoins to be successfully adopted, preliminary feasibility studies, pilot projects, and clear regulatory frameworks must be established. Public-private cooperation will be crucial in overcoming technical and institutional hurdles.
# New Dynamics in the Stablecoin Market
Most existing stablecoins are pegged to the U.S. dollar, reinforcing the dollar’s dominance in global financial markets. Recently, several Asian countries have begun issuing stablecoins based on their own currencies, reflecting a global economic trend toward reducing dollar dependence in trade, investment, and financial transactions.
This report addresses the question, “Why are Asian countries issuing national currency stablecoins in a dollar-dominated environment?” It examines key examples of these stablecoins and assesses their potential role in expanding the use of non-dollar stablecoins within Asian financial markets.
# Reasons for Issuing National Currency Stablecoins in Asia
The primary motivation for introducing national currency stablecoins is to secure monetary sovereignty. By pegging stablecoins to their own currencies, countries can implement monetary policies that align with their economic goals, enhancing economic and political autonomy. This is especially useful for managing external economic pressures during periods of significant foreign exchange market volatility.
Past currency crises have led Asian countries to focus on stablecoins as a tool for economic stability and resilience. However, most nations are leaning more toward the development of central bank digital currencies (CBDCs) than private stablecoins. CBDCs allow for direct control over monetary policy and the financial system, making regulation and management more straightforward. Few countries have allowed the issuance of stablecoins so far, with most still in the regulatory framework development stage.
Despite these efforts, limiting the spread of dollar-based stablecoins like USDT and USDC is challenging. In South Korea, an estimated 10% of total trade is conducted using dollar stablecoins that are not officially recorded in statistics. To overcome such constraints, governments are actively drafting policies to enhance their competitive stance in the global stablecoin market.
# Case Studies
## StraitsX Singapore Dollar (XSGD)
Issued by StraitsX, XSGD is a notable stablecoin pegged to the Singapore dollar. It operates on five networks, including Ethereum, with a market capitalization exceeding $18 million. Operating under the Monetary Authority of Singapore’s Payment Services Act, XSGD has become a trusted stablecoin in the Asian market.
XSGD has facilitated cross-border transactions for Southeast Asian businesses and traders. Notably, in 2024, Singapore’s leading super app Grab will begin offering digital wallet services using XSGD and other cryptocurrencies, increasing its real-world utility. By leveraging a Singapore dollar-based stablecoin, businesses can reduce costs associated with converting to U.S. dollars and improve transaction speeds.
## Rupiah Token (IDRT)
IDRT, an Indonesian rupiah-pegged stablecoin, operates on various networks, including Ethereum and Binance Chain, and boasts a market capitalization of $4.8 million. While the Indonesian government does not directly support specific stablecoins, it maintains a positive stance toward blockchain technology to enhance financial inclusion and stimulate digital economic growth.
IDRT is actively traded on major centralized and decentralized exchanges like Binance, Uniswap, and PancakeSwap, enabling users to transact and invest in rupiah-linked currency. High interoperability with popular exchanges has expanded IDRT’s presence in the DeFi ecosystem, making it a practical tool for investors seeking exposure to the Indonesian currency within the cryptocurrency market.
## StraitsX Indonesian Rupiah (XIDR)
Issued by Xfers, XIDR is a key component of the StraitsX ecosystem alongside XSGD. Despite its relatively small market capitalization of $124,960, it shows promise for growth in line with the expansion of Indonesia’s blockchain financial infrastructure.
XIDR offers a broader ecosystem than its competitor IDRT, supporting various DeFi platforms, institutional custody services, and personal wallets, enhancing its utility in fields such as DeFi and institutional trading. As a latecomer, XIDR lags behind IDRT in market cap but is anticipated to play a critical role as a fast and efficient payment method in Southeast Asia’s online retail market.
## Indonesia Rupia Stablecoin (IDRX)
Developed by PT IDRX Indo Inovasi, IDRX is a rupiah-linked stablecoin operating on multiple blockchain networks, including Polygon. It aims to bridge traditional finance and Web3 as the digital version of Indonesia’s fiat currency.
Like other stablecoins, IDRX focuses on activating the DeFi market, facilitating cross-border remittances, and providing a hedge against cryptocurrency market volatility. Although still in its early stages, IDRX has partnered with Indonesia’s largest cryptocurrency exchange, Indodax. While IDRX trading functionality is not yet available, its expansion is anticipated given Indodax’s influence.
## BiLira Turkish Lira (TRYB)
The Ethereum-based Turkish lira stablecoin BiLira (TRYB) offers meaningful insights for the Asian market. With a market capitalization of $34.6 million, BiLira operates without direct regulation, filling a gap in international remittances for the Turkish lira. Recently, BiLira launched its cryptocurrency exchange, BiLira Kripto, improving access to Turkish lira-based stablecoin transactions.
However, approximately 4% of Turkey’s GDP is spent on purchasing stablecoins, highlighting a paradox. Due to the continual depreciation of the Turkish lira, more stablecoins pegged to the U.S. dollar are preferred over local stablecoins like BiLira. This underscores the importance of maintaining domestic currency value for local stablecoin success.
## Tether CNHt (Chinese Yuan)
Issued by Tether, CNHt is a stablecoin pegged to the offshore Chinese yuan, facilitating international trade settlements for Chinese businesses. Despite China’s stringent cryptocurrency regulations, CNHt enables yuan transactions without exchange rate volatility risks.
CNHt competes with China’s official digital currency, the digital yuan (e-CNY), which is deeply integrated into the domestic financial system with strong government support. Recently, the digital yuan’s accessibility has been further enhanced through integration with Huawei’s HarmonyOS NEXT operating system.
While CNHt focuses on offshore markets and international trade, the digital yuan is widely used for everyday transactions in Beijing and Shanghai. Consequently, the digital yuan’s influence is more significant within mainland China compared to private stablecoins like CNHt.
## GMO JPY (GYEN)
Issued by GMO Trust and operating under U.S. regulation, GYEN is a yen-pegged stablecoin on the Ethereum network with a market capitalization of $10 million. Unlike other stablecoins targeting retail markets or emerging economies, GYEN focuses on institutional clients, providing a secure and structured yen trading alternative. Bitstamp was the first major exchange to list GYEN, broadening its industry presence.
Legally, GYEN complies with New York State’s stringent financial regulations, ensuring high levels of transparency and consumer protection. Although it remains unregulated in Japan and its domestic use is limited, Japan’s policies promoting blockchain and fintech might integrate assets like GYEN into its digital financial ecosystem.
# Key Considerations and Future Prospects for Stablecoin Adoption in Asia
## Key Considerations
Interest in national currency-based stablecoins is rising across Asia. Governments and enterprises are exploring specific strategies to integrate these digital currencies into their economies. The table below summarizes key stablecoin use cases, expected benefits, and challenges in the adoption process, highlighting essential factors for successful national stablecoin implementation.
Monetary sovereignty remains a significant driving force, as stablecoins enable countries to reduce foreign currency dependency and reinforce control over their monetary systems. This is particularly critical for nations with unstable currencies or significant external economic pressures.
Compliance with regulations and gaining consumer trust are equally vital. Governments must establish clear regulatory frameworks ensuring transparency and mitigating misuse, while corporations must build reliable and user-friendly systems to gain public confidence. This can also enhance financial inclusion in regions with limited access to banking services.
Lastly, cross-sector collaboration is crucial. Strategic cooperation between governments, fintech companies, and traditional financial institutions will determine the success of integrating stablecoins into existing ecosystems. By considering these factors comprehensively, countries can establish a robust foundation for the stablecoin adoption that aligns with their economic and social goals.
## Conclusion
National stablecoins offer Asian countries a unique opportunity to strengthen financial sovereignty, improve currency management, and modernize payment systems. Governments can use stablecoins pegged to their currencies to develop safe and efficient digital financial solutions that align with their priorities.
However, adopting stablecoins requires a systematic approach, including thorough feasibility assessments, pilot projects, and transparent regulatory frameworks. Based on strategic public-private cooperation, national stablecoins could become the foundation for sustainable economic growth and innovation. They are also expected to open new financial frontiers in cross-border transactions and regional cooperation.
*The above article is a full report from
