Xfers believes that it is time that other national currencies also receive a share of the action.
Singapore-based payment company Xfers announced on Monday the official launch of its stablecoin XSGD, linked to the Singapore dollar.
The stablecoin would be one of the first tokens denominated SGD, giving Singaporean companies and individuals a way to conduct transactions in cryptom currencies backed by their domestic currency. SGD is launched in the Zilliqa and Ethereum blockchains. The token is launched as part of the Xfers StraitsX initiative.
The stablecoin is said to comply with the Travel Rules, although Aymeric Salley, head of StraitsX, told Cointelegraph that this mainly involves the PSN01 guidelines of the Monetary Authority of Singapore.
The set of rules mainly addresses the identification requirements of users, who can only purchase or redeem stablecoin on the Xfers platform after full verification. The platform is also required to conduct ongoing risk assessment and transaction monitoring, although these standards can be found in many existing anti-money laundering frameworks around the world.
However, Salley noted that Singapore’s regulations do not distinguish between different forms of e-money, which means that crypto-companies can operate in the country as long as they „can demonstrate that they comply with a set of guidelines“.
The token itself can be freely withdrawn and processed with non-custodial wallets, Salley said.
The initial use cases of XSGD mainly involve financial institutions, specifically cross-border money transfers and access to the financial system for crypto-based institutions. Xfers‘ head of payments, Sharon Paul, told Cointelegraph
„Payments, most of the time, are the first step in enabling financial access. With this in mind, and noting the increase in tokenised assets, it was a natural progression for our team to include stablecoins in our payment option set. We are delighted to offer XSGD as an interoperable settlement option and therefore perfect for the digital asset and capital markets industries.
The team is pushing for currency adoption throughout the DeFi ecosystem as well. It is currently available on Zilswap, a decentralised exchange based in Zilliqa. The token also exists as an ERC-20 contract on Ethereum, which would also make inclusion in DEXs such as Uniswap possible.
Salley noted that the stablecoin space is currently dominated by the US dollar, and it is the company’s belief that other currencies should also be represented:
„We have seen the adoption of stablecoins rise rapidly over the years, however 98% of the market is dominated by dollar-denominated stablecoins; we believe that now is the time for stablecoins linked to other national currencies, such as the Singapore dollar, to emerge“.
Singapore’s blockchain ecosystem is relatively vast, comprising over 200 projects from block chains and investment companies alike. The fiduciary gateway offered by XSGD could enable these companies to interface more easily with global cryptomarkets, although the country’s cryptomone infrastructure does not appear particularly underdeveloped. Major exchanges such as Binance, Kraken or Coinbase serve the country through their global platforms or dedicated subsidiaries.