Singapore’s Stablecoin Payments Approach Record $1 Billion

Singapore is reportedly growing increasingly fond of stablecoin payments.

Payments with the digital assets during the second quarter hit a record high of nearly $1 billion in the city state, Bloomberg News reported Wednesday (Sept. 11), citing data from Chainalysis.

Merchants use stablecoins because of “efficiency and low cost,” said Chainalysis Cybercrimes Research Lead Eric Jardine said. Stablecoin payments in Singapore came to around $161 million in the second half of last year, the data showed.

Stablecoins, designed to hold a steady $1 value and backed by cash/bond reserves, are chiefly used for cryptocurrency trading and, as Bloomberg notes, are sometimes criticized for their popularity in underworld circles.

However, they account for a tiny fraction of actual payments, dwarfed by methods such as retail cards — $56.2 billion in Singapore in the second half of last year — Bloomberg said.

Singapore — one of the world’s most digitally-engaged countries, per PYMNTS Intelligence research — has been working to establish itself as a hub for digital assets.

A report earlier this year by Coinbase and Seedly found that 57% of Singapore’s “finance-forward” residents own cryptocurrency, with most of those interviewed having invested between $1,000 and $25,000.

“We are encouraged by the results of the recent survey in Singapore that underscore both the rising interest in cryptocurrency and staking, further solidifying our conviction that decentralized technologies have the power to broaden access to financial services and represent the future of finance,” Coinbase wrote in a blog post.

PYMNTS wrote recently that stablecoins show promise as a way to streamline cross-border transactions, especially in the B2B sector.

“It’s important to know that crypto is not just bitcoin and Doge and NFTs,” Sheraz Shere, head of payments at Solana Foundation, told PYMNTS in May. “… Blockchains are really alternative rails for payments and financial assets.”

“An issue has been that the technology has not been user-friendly,” Shere added. “It’s all been designed by engineers … to be very tech-centric and not use case or UX centric.”

Traditional methods of international payment like wire transfers, can be slow, expensive and saddled with regulatory hurdles, that report noted. But stablecoins offer a more efficient alternative, with nearly instant transactions, lower fees, and fewer intermediaries.

“Because stablecoins are pegged to a stable asset, businesses can use them to conduct transactions without worrying about currency fluctuations that could affect the final amount received or paid,” PYMNTS wrote.