Singapore stablecoin issuer offers tips for Hong Kong counterparts

The issuer of XSGD - the only Singapore dollar-backed stablecoin and one of the world's major non-US dollar stablecoins - said its commitment to strict regulatory compliance and emphasis on cross-border payments could serve as a model for stablecoin issuers in Hong Kong.

In an interview with the South China Morning Post on Thursday in Singapore, CEO Liu Tianwei said StraitsX was working with regulators and traditional financial institutions to support cross-border payments - an approach that may provide insights for future Hong Kong stablecoin issuers.

"It's quite easy not to be legal," Liu said on the sidelines of Token2049, the world's largest cryptocurrency industry gathering where stablecoins were a hot topic. "If you want to get it done, you really need to do it in the right spectrum."

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Liu said that stablecoin issuers needed to establish "very strong banking relationships", as tokens still required the backing of traditional banking systems and payment networks to reach clients and facilitate redemptions.

His vision for stablecoins aligns with existing regulatory and financial frameworks, in contrast with Donald Trump Jnr, the US president's eldest son and co-founder of World Liberty Financial, who promoted USD1 - the company's US treasuries-backed stablecoin - as a potential way to "dollarise" the global economy.

Liu saw stablecoins as useful tools and stressed that they were "definitely not" intended to undermine central banks. He said stablecoins could significantly improve the efficiency of cross-border settlements.

For example, when a holder of a Hong Kong bank card buys a cup of coffee at a Starbucks in Singapore, the transaction is completed in real time, but the settlement may take three to seven days via the traditional banking system through Swift. By using stablecoins, the settlement process could be expedited considerably, Liu said.

The prevalence of US dollar stablecoins has presented challenges for traditional financial centres like Singapore and Hong Kong. Hong Kong's stablecoin ordinance, effective from August, aims to establish a licensing and regulatory framework for the virtual asset, with the city's government expected to issue the first licences early next year.

For now, Singapore is slightly ahead of Hong Kong. On Wednesday, XSGD, which has been pegged to the Singapore dollar since 2020, began trading on the Coinbase crypto exchange, positioning it as a potential pricing unit for bitcoin, ether and other digital tokens.

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Stablecoins are cryptocurrencies designed to maintain a stable value, typically pegged to a fiat currency like the US dollar, making them far less volatile than other cryptocurrencies.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2025 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2025. South China Morning Post Publishers Ltd. All rights reserved.

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