StraitsX is the creator of XSGD, the first Singapore Dollar stablecoin globally, and XIDR, the Indonesian Rupiah stablecoin. As a Major Payment Institution in Singapore, StraitsX empowers users to manage payments seamlessly and integrate their accounts with digital asset platforms.

Benzinga recently spoke with StraitsX co-founder Tianwei Liu to delve into the origins of StraitsX, the transformative role of stablecoins in cross-border payments, his outlook on the future of stablecoins and digital payments, and much more.

What inspired you to co-found StraitsX, and how did you identify the need for stablecoins like XSGD and XIDR in Southeast Asia?

The inspiration behind StraitsX dates back to when I was sent to Silicon Valley for a student exchange with Standford University while working full-time at a local startup. Back then, I was a software engineer, training in computer science and this gave me my first taste of building something from scratch and working in a fast-paced environment. It was exactly during this time that Amazon launched the first edition of the Kindle which led to many of my friends asking if I could purchase it on their behalf and ship it back to Singapore from the United States. However, problems arose when they couldn't figure out a way to pay me because I was overseas for a long period of time and digital payment apps like PayPal weren't available in Asia. This was when I realized the gap in the market and set out to create an API to solve this problem — and that is the founding story of StraitsX (previously known as Xfers).

In Southeast Asia, one of the biggest problems we are facing is a bank penetration problem, but I believe that we have made significant improvements as an industry with new entrants joining the space. At StraitsX, we've always been at the forefront of troubleshooting this problem that's why we were intentional with our decision to launch the first Singapore dollar and Indonesian Rupiah-pegged stablecoins, XSGD and XIDR.

Can you explain how Project Orchid and Purpose Bound Money are shaping the future of digital currencies in Singapore?

The APAC region is poised to see a 230% increase in real-time payments network volume, reinforcing its position as the world's most forward-looking region. This growth is driven by the region's dynamic economic landscape and the accelerating adoption of digital finance solutions. In fact, digital asset payments in Singapore alone neared US$1 billion in the second quarter of 2024, signaling a rise in adoption. When it comes to Purpose Bound Money (PBM), it is a protocol that specifies the conditions upon which an underlying digital currency such as stablecoins can be used, and the use cases range across various purposes including e-commerce, contracts, donations, and even cross-border payments. By automating business logic behind payments and reducing the need for traditional processes, PBM enhances efficiency, transparency, and trust in the digital asset ecosystem.

With a large population and increasing digitization, there is fertile ground for digital financial services in the APAC region. To fully harness the potential of real-time payments and digital currencies, all stakeholders must collaborate to architect an industry that supports financial inclusion by allowing emerging markets to tap into new revenue streams.

How does StraitsX differentiate itself from other payment infrastructures in the digital assets space across Southeast Asia?

In Southeast Asia where economic growth is rapid but financial inclusion varies across different markets, stablecoins offer an accessible and affordable solution for cross-border payments. By leveraging blockchain technology, StraitsX provides close to instantaneous, low-cost transaction rates, effectively eliminating inefficiencies of traditional payment systems. Our main differentiating factor lies in our close collaboration with industry leaders and regulators. This includes our involvement in the Monetary Authority of Singapore (MAS) projects and partnerships with industry leaders like Grab and Ant International. Through our involvement in MAS' Project Orchid, we commenced our partnership with Grab and Ant International to launch a network that makes cross-border payments seamless for tourists and businesses alike, expanding the utility of digital payments across borders and driving new revenue streams for merchants.

Regulatory compliance is another element that differentiates us from other payment infrastructure providers in the evolving digital asset landscape. Our commitment to remaining compliant not only ensures a secure and trusted infrastructure for our users but has also earned us a "stamp of approval" from regulators. I believe that staying on course on the regulations front is critical to building trust within the financial services landscape. In my opinion, this is the best way to encourage greater user adoption.  Ultimately, our long-term goal is to bridge the gap between TradFi and DeFi, empowering underserved communities to participate in the global trade ecosystem. The large underserved communities in Southeast Asia have been overlooked for far too long. Since our founding, we've made a concerted effort to pave the way for a more inclusive and resilient financial ecosystem for all — one that allows individuals and businesses in Asia to thrive.

What role does the Monetary Authority of Singapore (MAS) play in your vision for the future of stablecoins and digital payments in the region?

MAS' forward-thinking approach to digital assets has created an environment that is conducive to digital asset innovation and adoption. By striking a balance between regulation and innovation, MAS has established a blueprint for successful and sustainable growth in this sector. This has encouraged banks to embrace new technology and fintech startups to embark on their respective projects as boundaries for responsible innovation have been set in stone.

A robust, secure, and efficient infrastructure for digital assets is essential as Singapore works towards building a corridor that is interoperable with various payment and settlement networks in the wider payments landscape. At an individual level as a fintech, our responsibility lies in ensuring that our solutions provide fast and safe access to digital assets, the best possible user experience, and platform security. At StraitsX, we believe that regulatory compliance will be a significant factor that determines the future of stablecoins and digital payments in the region, especially for an industry that is still relatively nascent.

Since our inception, we've been working closely with regulators to launch our stablecoins and build our API, to ensure they meet the highest industry standards. As a result of our commitment, we received full approval from the MAS as a Major Payment Institution licensed for digital payment token services. With this license, we are authorised to issue stablecoins that are aligned with the upcoming MAS stablecoin regulatory framework.

How do StraitsX stablecoins like XSGD and XIDR provide value to personal and business account holders, and what real-world use cases have you seen emerging?

Collectively as a region, APAC is leading in the digital payments space, accounting for 70% of global digital wallet spending at $9.8 trillion, signaling that there is evidently a compelling value proposition for its users, both individual and small businesses. With the unrivalled stability from being pegged to fiat currencies, stablecoins ensure predictable value, making them a secure alternative to traditional currencies especially in markets with volatile economies. Moreover, StraitsX stablecoins facilitate swift and efficient transactions, proving invaluable for small businesses and individuals who require instantaneous settlement. Beyond speed, these stablecoins also boast competitive transaction fees, making them a cost-effective choice for various financial activities. Their global accessibility further expands their utility, as they can be used for international payments, reducing the need for currency conversions and associated costs.

For Singapore, the decision came about because the market receives a considerable number of tourists every year — 13.6 million in 2023. To make their overall experience as seamless and hassle-free as possible, launching a digital payment solution was a natural next step for travelers. Through our partnership with Grab and Ant International, tourists visiting Singapore whose native digital wallets are housed under AliPay+ will be able to pay using the wallets they’re most familiar with at any Grab merchant without having to carry cash or worry about credit card exchange rates since all transactions will be settled on the backend with the XSGD.

Through these benefits and by addressing real-world needs, StraitsX stablecoins are empowering individuals and businesses to transact more efficiently and securely in the digital age. As we continue to innovate and expand their use cases, we envision a future where StraitsX stablecoins play a pivotal role in shaping the digital economy.