Singapore’s Surge in Stablecoin Payments Reaches $1 Billion
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Loading... - Mizuki Hoga
- 15 Oct 2024
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Singapore is experiencing a growing shift towards stablecoin payments, with transactions in the second quarter hitting a record high of nearly $1 billion, according to a report by Bloomberg News on September 11. This data, sourced from Chainalysis, highlights the increasing adoption of these digital assets across the city-state.
Merchants are drawn to stablecoins because they offer “efficiency and low cost,” said Eric Jardine, Cybercrimes Research Lead at Chainalysis. In comparison, stablecoin payments totaled just $161 million in the second half of last year, underscoring the sharp growth in their use.
Stablecoins, which are pegged to a stable value like the U.S. dollar and backed by reserves of cash or bonds, are primarily used for cryptocurrency trading. However, they are sometimes criticized for their association with illicit activities. Despite their rising popularity, stablecoins account for only a small fraction of the overall payment landscape in Singapore. Traditional methods, such as retail card transactions, still dominate, with $56.2 billion in transactions during the second half of 2023, Bloomberg reported.
As one of the most digitally-savvy nations, Singapore has been actively positioning itself as a hub for digital assets. A recent survey conducted by Coinbase and Seedly revealed that 57% of Singapore's “finance-forward” residents own some form of cryptocurrency, with most investments ranging between $1,000 and $25,000.
Coinbase, in a blog post, expressed optimism about the rising interest in cryptocurrency and staking, noting that it supports their belief in the potential of decentralized technologies to expand access to financial services and reshape the future of finance.
In addition to retail use, stablecoins also show promise for streamlining cross-border payments, especially in the B2B space. As PYMNTS noted, the current international payment infrastructure, like wire transfers, can be slow, costly, and burdened with regulatory barriers. Stablecoins provide an alternative by enabling nearly instant transactions, lower fees, and fewer intermediaries.
“It’s important to understand that crypto is more than just bitcoin, Doge, or NFTs,” said Sheraz Shere, head of payments at the Solana Foundation, in an interview with PYMNTS in May. “Blockchains represent new rails for financial transactions.” However, Shere acknowledged that one of the challenges lies in the technology’s complexity, as it has traditionally been designed by engineers with a focus on technical functionality rather than user experience or practical applications.
Because stablecoins are pegged to a fixed asset, businesses can use them without worrying about currency fluctuations affecting payments, PYMNTS added. This stability makes them an attractive option for conducting international transactions efficiently and cost-effectively.
