TL;DR

• Growing National Stablecoins in Asia: Several Asian countries are developing stablecoins pegged to local currencies to assert monetary sovereignty and reduce dependence on the U.S. dollar in global trade. These stablecoins provide efficiency in cross-border payments and align with the national financial strategies of countries like Singapore and Indonesia.
• Case Studies Show Highs and Lows: Projects like XSGD is paving the way for stablecoin adoption, enabling faster and cheaper transactions while reducing currency conversion costs. However, challenges remain, such as limited usage and market adoption in smaller stablecoins like XIDR.
• Key Steps for Broader Adoption: For national stablecoins to achieve their full potential, governments should focus on conducting feasibility studies, running pilot programs, and establishing clear regulatory frameworks. Collaboration between public and private sectors will be essential to overcome technical, regulatory, and operational hurdles.

1. A Dynamic Shift in Stablecoin Adoption

Most stablecoins are currently pegged to the U.S. dollar (USD), reinforcing the dominance of the dollar in global finance. However, Asia has started to shift the narrative towards issuing stablecoins pegged to local currencies. This change is aligned with broader global economic trends, as many countries look to reduce their dependency on the U.S. dollar in trade, investment, and financial transactions.

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

2. Benefits of National Stablecoins

A primary motivation for issuing national stablecoins is to maintain monetary sovereignty. By pegging stablecoins to their local currencies, countries can ensure their monetary policies align with national economic objectives. This allows for greater control over both economic and political outcomes. Nations can better manage external economic pressures, which is especially crucial during periods of foreign exchange market volatility.

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

CBDCs offer governments more direct control over monetary policy and financial systems, making them easier to regulate than private stablecoin alternatives. Currently, only a few countries allow stablecoin issuance. Most are still in the process of developing regulatory frameworks and considering implementation.

However, limiting the spread of USD-based stablecoins like USDT and USDC is proving to be a challenge. In Korea, it’s estimated that approximately 10% of all trade occurs through USD stablecoins, transactions that often go unrecorded in official statistics. Recognizing these practical limitations, governments are accelerating their efforts to develop policies that can help them compete effectively in the global stablecoin market.

3. Case Studies: Non-Dollar Stablecoin Projects in Asia

3.1. StraitsX Singapore Dollar (XSGD)

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

Users can top-up in Grab App using XSGD. Source: blockhead.co

XSGD enables seamless cross-border transactions in Singapore dollars, benefiting businesses and traders operating in Southeast Asia. In 2024, Singapore’s super-app Grab allowed users to top up their digital wallets using cryptocurrencies, including XSGD, expanding its utility in daily transactions. By using a stablecoin tied to the Singapore dollar, companies can avoid converting to USD, save on exchange fees, and enhance transaction speed.

3.2. Rupiah Token (IDRT)

IDRT, issued by PT Rupiah Token Indonesia, is a stablecoin pegged to the Indonesian Rupiah (IDR). With a market cap of over $4.8 million, it operates on Ethereum and Binance Chain, among other networks. While the Indonesian government does not promote specific stablecoins, it has shown 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 on various CEXs and DEXs, such as Binance, Uniswap, and PancakeSwap, allowing users to trade and invest with a currency pegged to the Indonesian Rupiah. This accessibility on popular exchanges broadens IDRT’s role in decentralized finance (DeFi) ecosystems, making it a practical tool for users seeking exposure to Indonesian currency within the crypto space.

3.3. StraitsX Indonesian Rupiah (XIDR)

XIDR Ecosystem. Source: StraitsX

Also issued by Xfers, XIDR is pegged to the Indonesian Rupiah and is part of the broader StraitsX ecosystem, which includes XSGD. Although it has a relatively small market cap of $124,960, XIDR shows promise for growth, particularly as Indonesia integrates blockchain solutions into its financial infrastructure.

Compared to IDRT, XIDR operates within a more extensive ecosystem, supporting multiple DeFi platforms, institutional custody solutions, and a wider range of personal wallet options, which may give it broader utility across various sectors including decentralized finance and institutional trading. Despite its multi-sector presence, XIDR has a lower market cap than IDRT. This may be because IDRT established itself in the field earlier. In the future, XIDR could play a pivotal role in Southeast Asia’s finance sector, facilitating quick and efficient payments for online retailers across the region.

3.4. Indonesia Rupia Stablecoin (IDRX)

IDRX, developed by PT IDRX Indo Inovasi, is a stablecoin pegged to the Indonesian Rupiah and operates across multiple blockchain networks, including Base. Its primary aim is to connect traditional finance and Web3 by providing a stable digital representation of Indonesia’s national currency.

Source: IDRX

Similar to other stablecoins, IDRX seeks to enable decentralized finance applications, facilitate cross-border payments and remittances, and offer stability for hedging against cryptocurrency market volatility. Although still in its early stages, IDRX has already partnered with Indodax, Indonesia’s largest cryptocurrency exchange by market share. While it is not yet equipped with advanced features like fair-trading mechanisms, the project demonstrates considerable potential for wider adoption and functionality expansion, reinforcing its role in Indonesia’s evolving digital economy.

3.5. BiLira Turkish Lira (TRYB)

Although based in Turkey, BiLira (TRYB), an Ethereum-based stablecoin pegged to the Turkish Lira, offers relevant insights for Asian markets. With a market cap of approximately $34.6 million, BiLira operates without direct regulation, presenting a higher risk but addressing a gap in cross-border payments involving the Turkish Lira. In addition, BiLira, the developer of TRYB, introduced its innovative cryptocurrency exchange, BiLira Kripto. This platform provides users with more access to trade and transact with the Turkish lira-backed stablecoin.

However, given that 4% of Turkey’s GDP is now directed toward stablecoin purchases, driven by the ongoing instability of the Turkish Lira against the USD. This presents a significant challenge for local stablecoins like BiLira to compete with dominant options like USD.

3.6. Tether CNHt (Chinese Yuan)

Tether CNHt, pegged to the offshore Chinese Yuan (CNY), serves as a stablecoin for international trade involving Chinese businesses. Despite China’s strict regulations on cryptocurrency activities, CNHt allows businesses to settle transactions in Yuan without the volatility associated with exchange rates, providing a solution for traders looking to transact in Chinese currency.

However, it is important to note that Tether CNHt competes with the official Chinese Digital Yuan (also known as e-CNY), which has seen more widespread adoption in China. The Digital Yuan is heavily promoted by the Chinese government, integrated into domestic financial systems, and favored for retail and institutional transactions due to its legal status and backing by the People’s Bank of China. Additionally, its recent integration into Huawei’s HarmonyOS NEXT operating system has significantly enhanced its accessibility, further solidifying its position within China’s digital finance ecosystem.

In contrast, Tether CNHt is positioned for use in offshore markets and international transactions, offering an alternative to USD-pegged stablecoins. For domestic use, the Digital Yuan is increasingly adopted for daily transactions, such as retail payments in Beijing and Shanghai. This widespread rollout makes it more favored within mainland China compared to private stablecoin alternatives like CNHt.

3.7. GMO JPY (GYEN)

GMO JPY (GYEN) is a stablecoin issued by GMO Trust, a regulated entity based in the United States. Pegged to the Japanese Yen (JPY), GYEN operates on Ethereum and has a market cap of $10 million. Unlike other stablecoins that primarily target retail or emerging markets, GYEN is designed to serve institutional clients, providing a more secure and regulated alternative for businesses dealing in Japanese Yen. Bitstamp is one of the first CEX to accept GYEN, marking its movement in the crypto industry.

Regarding the legal side, the stablecoin complies with New York State’s stringent financial regulations, ensuring high transparency and consumer protection. Although GYEN is not regulated under Japanese law and is currently not allowed for use in Japan, Japan’s proactive stance on blockchain and fintech development suggests potential for future regulatory adaptation that could integrate assets like GYEN into the country’s digital finance ecosystem.

4. Key Considerations and Conclusion

4.1. Key Considerations

As interest in national stablecoins grows across Asia, governments and businesses are exploring practical steps to integrate these digital currencies into their economies. The following table outlines key use cases, associated benefits, and challenges for national stablecoin adoption.

The table highlights the foundational elements required for the successful adoption of national stablecoins. Economic sovereignty is a central driver, as stablecoins offer countries a way to reduce reliance on foreign currencies and reinforce control over domestic monetary systems. This is particularly critical in countries with volatile currencies or external economic pressures.

Regulatory compliance and consumer trust are equally important. Governments must establish clear frameworks to ensure transparency and prevent misuse, while businesses need to offer secure, user-friendly systems to gain public confidence. Stablecoins also provide an avenue to improve financial inclusion by extending digital financial tools to underserved populations, particularly in regions with limited banking access.

Lastly, collaboration across sectors is vital. Strategic partnerships between governments, fintechs, and traditional financial institutions will determine how well stablecoins integrate into existing ecosystems. By addressing these considerations holistically, countries can create a robust foundation for stablecoin adoption that aligns with their economic and social priorities.

4.2 Conclusion

National stablecoins offer a unique opportunity for Asian countries to strengthen financial sovereignty, improve monetary management, and modernize payment systems. By linking stablecoins to local currencies, governments can create digital tools that align with domestic priorities, offering a secure and efficient alternative to traditional systems.

However, stablecoin adoption must follow a structured approach, including rigorous feasibility assessments, pilot programs, and transparent regulatory frameworks. With strategic collaboration between public institutions and private industries, national stablecoins could provide a 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.

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