Stablecoins have evolved from niche digital instruments to a cornerstone of the global financial ecosystem, with a market cap exceeding $170 billion and over 1.2 billion wallets in use. But their role—whether as tools for everyday payment or vehicles for wealth creation—varies dramatically across regions. Nowhere is this more evident than in Southeast Asia, where countries like Singapore and the Philippines are charting divergent paths in stablecoin adoption, regulation, and real-world utility.
This divergence offers valuable insights for Hong Kong, which is navigating its own journey toward becoming a Web3 hub amid cautious regulation and low public adoption.
Singapore: Stability Through Regulation
In Singapore, stablecoins are not speculative instruments—they are engineered for compliance, efficiency, and integration into the real economy.
When Circle’s Vice President Yam Ki Chan said, “Asking what stablecoins are for is like asking what money is for,” he captured the essence of how mature markets view them: as digital cash. Circle’s USDC, backed by regulated reserves and licensed in multiple jurisdictions, exemplifies this philosophy. But in Southeast Asia, local players like StraitsX—a subsidiary of Fazz Financial Group—are taking it further by anchoring stablecoins to local fiat.
In 2019, Xfers (now Fazz) launched XSGD, the first Singapore dollar-pegged stablecoin. Unlike many early stablecoin projects born in crypto-native environments, Xfers emerged from a decade of深耕 (deep cultivation) in payment infrastructure across Singapore and Indonesia. This foundation gave it credibility with regulators and banks alike.
👉 Discover how regulated stablecoins are transforming cross-border payments today.
By 2023, StraitsX received in-principle approval (IPA) from the Monetary Authority of Singapore (MAS) to issue XUSD, a USD-backed stablecoin. This places it alongside Paxos as one of the few firms cleared under MAS’s pioneering stablecoin regulatory framework—the first in Southeast Asia.
MAS’s framework mandates:
- 100% reserve backing in high-liquidity assets (e.g., cash, short-term government securities)
- Prohibition on lending, staking, or investing reserves
- No algorithmic models allowed (a direct response to the TerraUSD collapse)
The goal? To ensure that only high-quality, reliable stablecoins enter circulation—ones that can be trusted for both digital asset transactions and real-world payments.
From Payments to Blockchain—and Back Again
Tianwei Liu, co-founder of Xfers and Deputy CEO of Fazz, emphasizes that users don’t need to know what a stablecoin is—they just need seamless experiences.
“We’re not adding blockchain for the sake of tech,” Liu says. “We’re solving real pain points: cross-border settlement delays, FX volatility during clearing, and fragmented payment rails.”
For example, when a Chinese tourist uses Alipay+ to pay at a Grab merchant in Singapore:
- RMB is converted into XSGD (on-chain)
- Transferred instantly via blockchain
- Converted back to SGD off-chain
The entire process settles in seconds—no SWIFT delays, no FX slippage. And crucially, the user sees nothing but a smooth QR code scan.
Despite Singapore’s near-total adoption of cashless payments (97%), stablecoin usage remains minimal compared to traditional channels. Retail payments via banks totaled ~S$480 billion annually—while XSGD’s cumulative on-chain volume since 2019 is around S$80 million.
Yet growth potential is clear. Mainland Chinese tourists contributed S$1.12 billion in spending in H1 2023 alone. As more travelers adopt digital wallets, demand for frictionless cross-border settlements will rise—and XSGD is positioned to capture that flow.
Philippines: Stablecoins as Tools for Inclusion and Wealth Creation
While Singapore focuses on stability and compliance, the Philippines sees stablecoins as engines of financial inclusion and economic empowerment.
With over 10 million overseas workers sending $37.2 billion in remittances in 2023—8.5% of GDP—the country has a strong incentive to reduce costs and speed up transfers.
Enter Coins.ph, a crypto-native platform that evolved from Bitcoin trading into a full-fledged fintech player. Acquired in 2022 by former Binance CFO Wei Zhou, Coins.ph now holds VASP, EMI, and FX licenses from the Bangko Sentral ng Pilipinas (BSP).
In May 2024, it entered the central bank’s stablecoin sandbox and launched PHPC, a 1:1 peso-backed stablecoin on the Ronin blockchain.
PHPC isn't just about payments—it's about wealth creation.
Gaming: The Gateway to Earnings
During the Axie Infinity boom, thousands of Filipinos earned supplemental income through play-to-earn (P2E) gaming. At its peak, Axie generated $35 million monthly for Philippine players—life-changing sums in a country where average monthly wages hover around $319.
But converting game earnings into usable cash was complex and risky:
- Players had to swap SLP tokens for WETH
- Then bridge to exchanges
- Finally withdraw to bank accounts—exposed to price swings
With PHPC, players can now convert earnings directly into a stable, regulated asset—without leaving the blockchain.
“We want users to earn, save, and spend—all within the same ecosystem,” says Zhou.
Today, PHPC has over 109,000 holders, though liquidity remains low (~$128K). But once it exits the regulatory sandbox (expected Q4 2024), Coins.ph plans broader rollout across wallets and exchanges—including Stables Money in Australia.
DePiN: Earning Through Infrastructure
Another emerging use case is Decentralized Physical Infrastructure Networks (DePiN). Projects like Filecoin reward users for contributing storage space—offering an extra $500/month income opportunity in economies where such sums matter.
“In developed nations, $500 extra may not move the needle,” Zhou notes. “But here? It changes lives.”
Coins.ph aims to become a gateway for Filipinos to access these opportunities—using PHPC as the settlement layer.
👉 Explore how stablecoins are unlocking new income streams globally.
Hong Kong: Lessons From Abroad
Hong Kong shares similarities with Singapore—strong regulatory intent but lagging adoption. Its VASP licensing regime is rigorous: requiring 98% cold storage of user assets, making compliance costly.
Only three platforms—HashKey Exchange, OSL, and HKVAX—hold full licenses. Despite retail trading opening in 2023, crypto user penetration remains under 19% (~1.37 million people), far below traditional stock investors.
Yet Hong Kong has advantages:
- Over 34 million annual visitors
- Strong tourism spending
- Plans to link Faster Payment System (“FPS”) with mainland payment networks
Like XSGD’s role in cross-border tourism payments, a HKD-pegged stablecoin could enable seamless spending for visitors using Alipay or WeChat Pay—settling instantly via blockchain without FX delays.
Moreover, Hong Kong’s stablecoin sandbox includes key players like Standard Chartered, Animoca Brands, and Hong Kong Telecom, focusing on cross-border use cases.
But challenges remain:
- Lack of “receivers” (merchants accepting HKD stablecoins)
- No major products denominated in HKD stablecoins
- Most DeFi and RWA protocols are USD-centric (98% of stablecoin volume)
Real-World Assets (RWA): Bridging Finance and Blockchain
One of the most promising frontiers is tokenized real-world assets (RWA)—from government bonds to corporate debt.
DigiFT, a MAS-regulated platform, issues tokenized bonds and funds purchasable in USDC or fiat. Similarly, Libeara—a Standard Chartered-backed platform—launched SGD Delta Fund, an AA-rated tokenized Singapore government bond fund.
But access remains limited:
- DigiFT requires investors to have >S$1M in financial assets
- SGD Delta Fund targets institutions only
“Technology is ready,” says Aaron Gwak of Libeara. “Now we need regulation and local stablecoin adoption to open doors for retail.”
Zhang Zhihao, CEO of DigiFT, agrees: “You can build it—but if no one uses it at scale, it’s just a demo.”
FAQ
Q: What are stablecoins used for in Southeast Asia?
A: In Singapore, they're used for cross-border payments and financial efficiency. In the Philippines, they support remittances, gaming earnings, and DeFi participation—serving as tools for inclusion and wealth creation.
Q: Are algorithmic stablecoins allowed in Singapore?
A: No. MAS explicitly bans algorithmic models due to systemic risks highlighted by the TerraUSD collapse.
Q: How do stablecoins help overseas Filipino workers?
A: They reduce remittance costs and settlement time—from days to seconds—and allow direct wallet-to-wallet transfers without intermediaries.
Q: Can Hong Kong compete with Singapore in stablecoin innovation?
A: Yes—but only if it builds compelling use cases around tourism, trade, and RWA tokenization while expanding merchant acceptance.
Q: Why aren’t more people using local-currency stablecoins?
A: Because ecosystems lack “receivers.” Even if you issue a stablecoin, users won’t adopt it unless there are goods, services, or investments priced in it.
Q: Will USD dominance in stablecoins continue?
A: Likely. Over 98% of stablecoin transactions are in USD. However, regional currencies like SGD and PHP may gain traction in local ecosystems if use cases expand.
The Road Ahead
Stablecoins are no longer experiments—they are infrastructure.
For cities like Hong Kong aiming to lead in Web3, the lesson is clear: technology alone isn’t enough. Success depends on building use cases that solve real problems—whether faster remittances in Manila or seamless tourist payments in Mong Kok.
Regulation must balance innovation with consumer protection. And crucially, local stablecoins must be integrated into daily life—not just traded on exchanges.
As Wei Zhou puts it: “The future isn’t about replacing fiat—it’s about making money work better.”
👉 See how next-generation financial tools are reshaping economies worldwide.