Fiat-backed stablecoins like XSGD and XIDR have a variety of real-world use cases, as Aymeric Salley, Head of StraitsX, and Svyatoslav (Slava) Garal, Regional Managing Director of Wirex Asia Pacific, discussed during the first instalment of StraitsX Sessions.
Wirex facilitates XSGD and XIDR use cases by offering an app, a card, and a personal (non-custodial) wallet where you can store, send, or swap the stablecoins with other fiat or cryptocurrencies, and spend them with merchants.
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Slava Garal, Wirex: As you know, about 56% of the entire global population lives here in this [Southeast Asia] region. We understand that the economy here is driven by money and how much money is circulating. We look forward to listing as many tokens [or ASEAN-denominated stablecoins] as possible.
Aymeric Salley, StraitsX: Our stablecoins are 100% backed by cash because we believe that that [is] what enables a token to maintain the peg. You need to have sufficient value backing the token. It [also] needs to be easily, and within a reasonable period of time, convertible back into the underlying asset.
Slava Garal, Wirex: Accepting [payments] is about three things.
First of all, it is receiving money fast enough as a merchant from your consumer. Then, it is to receive as much money as possible because merchants pay a lot of fees to the acquirers and to the scheme providers. The third one is transparency.
If you take card acceptance in a normal business, merchants usually pay many different fees. A single bill is usually composed of 20 different lines [of fees]. Sometimes they are just lost in these numbers. I think stablecoins close the gap and provide quite a lot of interesting benefits to the merchant.
Slava Garal, Wirex: Stability itself. As Aymeric said, it is not as volatile as other crypto [or digital] assets. Secondly, it is quick, it can be done easily, it can be done within a minute or seconds. Thirdly, it is transparent. There is only the blockchain fee to pay, and even that blockchain fee is not paid by the merchant, it is paid by the consumer.
Aymeric Salley, StraitsX: I definitely agree with all the various points Slava raised, and I think eventually, it is about [having] a frictionless experience.
Aymeric Salley, StraitsX: When we talk about payment – whatever it is, domestic payment, or cross-border payment – in different jurisdictions in different countries, you get a very different experience depending on what you are trying to do.
In Singapore, we are blessed with an efficient domestic payment network. If you want to make a peer-to-peer transfer to some of your friends through PayNow that works well, right? But if you think about this experience in other countries, this experience cannot be replicated by their existing infrastructure.
Aymeric Salley, StraitsX: The cross-border payment experience is not great. You pay high fees, settlement takes time, and sometimes it takes up to a week to get your money credited in the recipient bank account.
Stablecoins can play a very big role because they are not limited by space. Recently, the CEO of Circle, Jeremy Allaire, said something interesting – he said [to] think about the experience of sending an email – you are not asking yourself whether you are sending a domestic email or a cross-border email, you are sending an email. It does not matter if the recipient is in the US, Europe, Indonesia, or your neighbour, right? This is the experience that we are trying to replicate with stablecoins. Only stablecoins can do so because that is what the [blockchain] technology enables.
Aymeric Salley, StraitsX: The programmability aspect of stablecoins is very important, where the technology enables code rules into the smart contract. This gives new properties to money.
One thing that could happen is when 5G and Internet of Things (IOT) becomes widely available. If you think about the properties of money, today, one of the big properties has been that holding money requires personhood. You need to be a person to hold money, either as an individual, or as a group of individuals in a corporation. Only businesses and individuals can own money. In a world where there is IOT, there are stablecoins, there is 5G, systems can start paying systems, machines can pay machines, and that creates a whole new world of applications.
Slava Garal, Wirex: We are working to add new stablecoins and we will be relying on StraitsX [to issue stablecoins]. XIDR will be there soon. After that, the more [stablecoins] StraitsX has, we will follow.
Slava Garal, Wirex: The most important ones are there – Bitcoin, Ethereum, Avalanche, Polygon, Binance [and others]. Watch out, there will be new ones coming soon; very often, we work with partners to add new blockchains.
Slava Garal, Wirex: We just ended a promotion on 6 June 2022. Top up your wallet and with XSGD and we'll receive you can receive up to $15 in WXT tokens. Keep a lookout for more campaigns like this.