Singapore created its own digital currency to counter the total domination of the US dollar in the crypto space
On September 5, 2020, Singapore-based company Xfers announced the launch of a new digital currency, the XSGD stablecoin, pegged to the Singapore dollar.
It is part of a more global initiative, Xfers StraitsX, which aims to give businesses, companies and individuals in Singapore an opportunity to use the official stablecoin pegged to the official currency for their payments. To implement this idea, the Zilliqa and Ethereum blockchains are used. And XSGD itself, as one of the first Singaporean stablecoins, has every chance of success in this endeavor.
It is believed that it complies with all the rules for international transfers, although the person responsible for the StraitsX project, Aymeric Salley, stated that the developers were guided primarily by the recommendations of the Singapore Monetary Authority, in particular PSN01.
These guidelines primarily relate to user identification. So now you can only purchase a new stablecoin on the Xfers platform after full verification of your identity. Also, some of the recommendations are aimed at the need for continuous risk assessment and monitoring of transactions as part of the fight against money laundering.
In addition, Aymeric Salley noted that his country's rules are the same for all forms of cryptocurrency. Therefore, other companies can easily work with their tokens in it, if all this complies with the accepted norms and rules.
It was also stated that the new token is compatible with non-custodial wallets.
As conceived by the developers, XSGD can be used to provide official financial institutions with the ability to interact with the cryptocurrency space. In particular, to carry out international money transfers. In this regard, the head of payments at Xfers, Sharon Paul, stated the following:
“Access to new financial resources begins with the organization of payments. Therefore, against the background of growing interest in tokenized assets, our team considered it natural to create our own stablecoin and add it to the set of possible payment options. So XSGD quite successfully ensures the compatibility of the cryptocurrency market and traditional financial interaction mechanisms "
Also, the developers plan to implement XSGD in the decentralized finance ecosystem. This is not difficult, since it was originally designed as an ERC-20 token, which is currently traded exclusively on the Zilswap decentralized exchange. But nothing prevents us from adapting it for other DeFi objects, such as, for example, the Uniswap exchange.
Aymeric Salley said that the US dollar dominates the stablecoin space at the moment, and other currencies will need to be represented to reverse this trend.
“We are now witnessing a rapid increase in the popularity of stablecoins, but 98 percent of them are backed exclusively by US dollars. And we believe the time has come for stable tokens pegged to other currencies - the Singapore dollar, for example. "
The Singapore blockchain ecosystem is quite extensive and includes over 200 different projects and investment companies. And XSGD as a fiat gateway will allow these organizations to interact more effectively with the global cryptocurrency market, even despite their rather small total capacity.
As you can see, there is an interesting trend. Projects aimed at ending the dominance of the US dollar in the cryptocurrency space are being implemented in Europe, China, and now also in Singapore. Another question is how the cryptocurrency space will react to such, in fact, external influence. And will users agree to abandon the usual and seemingly stable dollar in favor of various alternatives? In any case, this Singapore initiative will be useful for strengthening the position of cryptocurrencies in the country, and at the same time around the world.
Published on the EXBASE based on materials from cointelegraph.com