Zilliqa-powered stablecoin launched by Xfers
The economic landscape of Southeast Asia makes DeFi a necessity, and stablecoins help.
In June 2019, Zilliqa and Xfers announced their partnership to explore blockchain payments.
Today we're seeing some of the early fruits of the partnership, with the reveal of the StraitsX stablecoin pilot. The first coin will be XSGD, a Singapore dollar-pegged stablecoin that runs on the Zilliqa blockchain, set to go live in December 2019.
Zilliqa is a high-throughput public blockchain, while Xfers is a Singapore-based fintech startup that's spreading digital payments to South East Asia. So far it serves some 10 million unique users every month across Singapore and Indonesia.
DeFinitive use cases
"With the transparency that blockchain provides, as well as the stablecoins being price-pegged to local fiat currencies, StraitsX aims to be the common ledger for digital assets, payments, fund transfers and eCommerce," said Xfers co-founder and CEO Tianwei Liu.
"Southeast Asia has a heterogeneous landscape, and Xfers wants to empower individuals and businesses to access financial opportunities regardless of their circumstances... StraitsX demonstrates our willingness to adopt technology to propel our vision of building an open banking infrastructure for the region."
It's a sensible vision for a region with high remittance rates, a large informal economy, high mobile connectivity, and low access to banking services. Across South East Asia as a whole, only 27% of people have a bank account, but the total number of mobile connections exceeds the total population by 33%.
Stablecoins, offer a great deal of flexibility in this area. They allow for seamless and easy storage and use of local currencies, and seamless, affordable domestic and cross-border payments, to underpin a decentralised finance (DeFi) ecosystem.
The basic idea is that anyone can access the full gamut of financial services on their phone, from anywhere, and that instead of being reliant on distant banks or informal financial services, people can have a wide range of services in the palm of their hand. Blockchain is useful in this regard, because it makes it all much cheaper and easier to build.
For an only semi-hypothetical example, you could use blockchain and digital currency to largely automate the process of acquiring a short term loan in Cambodia. You could have a Facebook messenger bot collect KYC information, borrowers can put up motorbikes as collateral, which is checked against registration information. The company funding the loans and managing the risks can make digital currency payments to a local network of pawnshop owners on the ground, who in turn provide the cash for borrowers.
In this fashion, by cutting out middlemen and cutting costs, you have a viable way of delivering affordable financial services to millions of people in the region, where it wasn't previously possible.
"We are excited for Xfers as they continue to make inroads into Southeast Asia. Harnessing the features of our enterprise blockchain, Xfers will be able to process a significant increase in user transactions more securely," said Zilliqa president Amrit Kumar. "Spurred on by the promise of greater financial inclusion, efficiencies and mobility, Zilliqa is proud to build on our existing partnership with Xfers to deliver on the shared promise of progress."
Disclosure: The author holds BNB, BTC at the time of writing.
- SEC crackdown on Binance, Kraken – What it means for Aussie investors
- Sam Bankman-Fried found guilty – what it means for Australian FTX victims
- Bitcoin’s price soars over 10% on ETF rumours – here’s why
- New regulations for Aussie crypto exchanges: What it means for investors
- Sam Bankman-Fried’s FTX trial starts tomorrow – what it means for FTX customers