National Stablecoins: Asia’s Strategy to Reduce Dollar Dependency

This report was written by Tiger Research offering analysis of the current state of stablecoins tied to local Asian currencies.

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TL;DR

• Growing National Stablecoins in Asia: Several Asian countries are developing stablecoins pegged to local currencies to assert monetary sovereignty and reduce dependence on the U.S. dollar in global trade. These stablecoins provide efficiency in cross-border payments and align with the national financial strategies of countries like Singapore and Indonesia.
• Case Studies Show Highs and Lows: Projects like XSGD is paving the way for stablecoin adoption, enabling faster and cheaper transactions while reducing currency conversion costs. However, challenges remain, such as limited usage and market adoption in smaller stablecoins like XIDR.
• Key Steps for Broader Adoption: For national stablecoins to achieve their full potential, governments should focus on conducting feasibility studies, running pilot programs, and establishing clear regulatory frameworks. Collaboration between public and private sectors will be essential to overcome technical, regulatory, and operational hurdles.

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1. A Dynamic Shift in Stablecoin Adoption

Most stablecoins are currently pegged to the U.S. dollar (USD), reinforcing the dominance of the dollar in global finance. However, Asia has started to shift the narrative towards issuing stablecoins pegged to local currencies. This change is aligned with broader global economic trends, as many countries look to reduce their dependency on the U.S. dollar in trade, investment, and financial transactions.

2. Benefits of National Stablecoins

Many countries in Asia, particularly those that have experienced currency crises, are especially sensitive to these issues. This makes stablecoins an attractive tool for reinforcing economic stability and resilience. However, most countries are prioritizing the development of central bank digital currencies (CBDCs) over stablecoins issued by private companies.

CBDCs offer governments more direct control over monetary policy and financial systems, making them easier to regulate than private stablecoin alternatives. Currently, only a few countries allow stablecoin issuance. Most are still in the process of developing regulatory frameworks and considering implementation.

However, limiting the spread of USD-based stablecoins like USDT and USDC is proving to be a challenge. In Korea, it's estimated that approximately 10% of all trade occurs through USD stablecoins, transactions that often go unrecorded in official statistics. Recognizing these practical limitations, governments are accelerating their efforts to develop policies that can help them compete effectively in the global stablecoin market.

3. Case Studies: Non-Dollar Stablecoin Projects in Asia

3.1. StraitsX Singapore Dollar (XSGD)

3.2. Rupiah Token (IDRT)

IDRT is widely used on various CEXs and DEXs, such as Binance, Uniswap, and PancakeSwap, allowing users to trade and invest with a currency pegged to the Indonesian Rupiah. This accessibility on popular exchanges broadens IDRT’s role in decentralized finance (DeFi) ecosystems, making it a practical tool for users seeking exposure to Indonesian currency within the crypto space.

3.3. StraitsX Indonesian Rupiah (XIDR)

Compared to IDRT, XIDR operates within a more extensive ecosystem, supporting multiple DeFi platforms, institutional custody solutions, and a wider range of personal wallet options, which may give it broader utility across various sectors including decentralized finance and institutional trading. Despite its multi-sector presence, XIDR has a lower market cap than IDRT. This may be because IDRT established itself in the field earlier. In the future, XIDR could play a pivotal role in Southeast Asia’s finance sector, facilitating quick and efficient payments for online retailers across the region.

3.4. Indonesia Rupia Stablecoin (IDRX)

3.5. BiLira Turkish Lira (TRYB)

3.6. Tether CNHt (Chinese Yuan)

Tether CNHt, pegged to the offshore Chinese Yuan (CNY), serves as a stablecoin for international trade involving Chinese businesses. Despite China’s strict regulations on cryptocurrency activities, CNHt allows businesses to settle transactions in Yuan without the volatility associated with exchange rates, providing a solution for traders looking to transact in Chinese currency.

3.7. GMO JPY (GYEN)

GMO JPY (GYEN) is a stablecoin issued by GMO Trust, a regulated entity based in the United States. Pegged to the Japanese Yen (JPY), GYEN operates on Ethereum and has a market cap of $10 million. Unlike other stablecoins that primarily target retail or emerging markets, GYEN is designed to serve institutional clients, providing a more secure and regulated alternative for businesses dealing in Japanese Yen. Bitstamp is one of the first CEX to accept GYEN, marking its movement in the crypto industry.

4. Key Considerations and Conclusion

4.1. Key Considerations

As interest in national stablecoins grows across Asia, governments and businesses are exploring practical steps to integrate these digital currencies into their economies. The following table outlines key use cases, associated benefits, and challenges for national stablecoin adoption.

The table highlights the foundational elements required for the successful adoption of national stablecoins. Economic sovereignty is a central driver, as stablecoins offer countries a way to reduce reliance on foreign currencies and reinforce control over domestic monetary systems. This is particularly critical in countries with volatile currencies or external economic pressures.

Regulatory compliance and consumer trust are equally important. Governments must establish clear frameworks to ensure transparency and prevent misuse, while businesses need to offer secure, user-friendly systems to gain public confidence. Stablecoins also provide an avenue to improve financial inclusion by extending digital financial tools to underserved populations, particularly in regions with limited banking access.

Lastly, collaboration across sectors is vital. Strategic partnerships between governments, fintechs, and traditional financial institutions will determine how well stablecoins integrate into existing ecosystems. By addressing these considerations holistically, countries can create a robust foundation for stablecoin adoption that aligns with their economic and social priorities.

4.2 Conclusion

National stablecoins offer a unique opportunity for Asian countries to strengthen financial sovereignty, improve monetary management, and modernize payment systems. By linking stablecoins to local currencies, governments can create digital tools that align with domestic priorities, offering a secure and efficient alternative to traditional systems.

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