Singapore Dollar Rate

Singapore Dollar Rate – The First Stablecoin Based On Singaporean Dollar

Blockchain critics are having a field day at this moment, with different projects cutting staff as cryptocurrency prices plunge. But what we can’t just turn a blind eye to is that the bear market is perhaps temporary owing to the cyclical nature of cryptocurrency valuations.

In order to solve the various underlying issues surrounding blockchain technology, innumerable blockchain projects are under development.

One of the highly touted saviors of this ecosystem is the so-called stablecoin.

Like the name suggests, stablecoins are the digital assets with stable prices. Each stablecoin is pegged to a corresponding asset.

Can Stablecoins Live Up To The Hype?

There has been a blooming of stablecoin varieties in the market, but only Tether has gained significant traction. All things being equal, it appears that the only use cases for stablecoins right now are identified with crypto trading.

Against this backdrop comes the launch of the first Singapore stablecoin called Singapore Dollar Rate (SGDR).

Created by the team behind blockchain startup Rate3, SGDR is a 1:1 Singapore dollar-backed stablecoin, that guarantees its users with full redeemability for Singapore dollars on demand.

Singapore’s Take on Blockchain and Cryptocurrency

For the individuals who are new, Singapore has been a financial hub in Southeast Asia, now turning to become Asia’s crypto hub. As compared to the rest of Asia, the regulators in Singapore are very much educated and more transparent about their views on both blockchain and cryptocurrency.

While regulatory vulnerabilities still linger over Korea and Japan, in Southeast Asia, the MAS has just given its opinion illustrating the application of securities laws to the digital token offerings and issuances.

Singaporean regulators have ostensibly been spearheading the financial and regulatory standards in Asia since the beginning of the nation’s founding by Lee Kuan Yew in 1965.

With the launch of its first stable coin SGDR, Singapore proved that it is the crypto hub of Asia.

About the Stablecoin “SGDR”

As the currency is currently in the closed beta, it is only available for the accredited or institutional investors at the moment.

Should there be any need for a stablecoin that is pegged to the Singapore dollar?

Well, yes and there is the fact that Singapore is one of the handful of countries with top AAA sovereign credit rating by Standard & Poor’s. What that means is that the higher your ratings are the less risky it becomes to invest in your bonds.

And by extension, the Singapore dollar is the very definition of stability today.

Benjamin Ong, who recently joined Rate3 in strategy role, believes in the potential of stablecoins to power the microtransactions for utilities, ecommerce, internet of things (IoT), and autonomous vehicle (AV) devices.

He says –

“AVs will still require to make and take payments of small amounts across regular daily cycles, such as when they pass a road toll, obtain an electrical recharge, enter a workshop for maintenance, or when commuters board them, making it essential for the cost per payment to remain low.”

Ong further says –

“Blockchain-enabled microtransactions could also enable a future where ordinary people can easily make passive income. For example, they can sell anonymized data, which their fitness wearables collect from their daily activities to a sports equipment manufacturer.”

SGDR Has Redeeming Qualities

Benjamin Ong brings up the concept of “redeemability,” which refers to the coin’s ease of converting it into fiat money.

Ong says –

“Knowing that 1 SGDR always legally entitles you to S$1 in a local bank account helps immensely on this point. People are probably hardwired to want to earn and spend in Singapore dollars while engaging with products in Singapore. Not many will own a US bank account, so the need to convert the US dollar stablecoins to fiat US dollars, and then from that to fiat Singapore dollars will involve too much friction for adoption to even occur.”

He adds –

“We wouldn’t see mass adoption of WeChat or Alipay for the Chinese yuan among Singaporeans largely because the friction in converting the currency is just too great. The network effects of the local currency for use in the said country is just too strong.”

Final Thoughts

With the increasing demand for stablecoin in Singapore, Rate3’s introduction of Singapore Dollar Rate (SGDR) may spark more growth and consumer interest within the nation.