Grab, XSGD issuer StraitsX to develop digital asset wallets to accept stablecoin payments
This will enable GrabPay merchants to begin accepting stablecoin payments from domestic, global consumers
[SINGAPORE] Grab and the Singapore dollar-backed stablecoin issuer StraitsX on Tuesday (Nov 18) announced the signing of a memorandum of understanding (MOU) to explore the development of a Web3-enabled payments infrastructure across Asia.
This proposed integration will enable GrabPay merchants across major Asian markets to begin accepting stablecoin payments from both domestic and international consumers via the widely used Web3, or digital asset wallets.
A stablecoin is a form of cryptocurrency designed to maintain a stable value relative to a certain asset, with a far lower volatility than other cryptocurrencies.
The stablecoin market has grown from US$200 billion at the start of the year to US$300 billion today, with Citi projecting it to grow to US$4 trillion by 2030 in a bull scenario. In Asia, the rise of such currency-backed digital tokens is putting pressure on institutions to rethink their financial plumbing.
The MOU between StraitsX and Grab will have two core components: a Web3-connected wallet integrated within the Grab app, and a stablecoin-based payment network that supports “compliant, secure, efficient clearing and settlement” across participating markets.
“Grab sees potential for Web3 technologies to improve cross-border retail payments while providing a familiar experience for users,” said Lim Kell Jay, head of Grab Financial.
Web3 is the idea of a new, decentralised Internet built on blockchains, which are distributed ledgers controlled communally by participants, according to McKinsey & Company. The current form of the Internet is termed Web2.
As part of the MOU, StraitsX will support the “technical development” of Web3 Wallets directly within the Grab platform. This will support payment processing, clearing and settlement.
The proposed collaboration will cover the regulatory and technical requirements for providing each participating merchant with a Web3-compatible wallet.
SEE ALSO
Seizing the stablecoin surge
In September, OKX Singapore launched stablecoin payments at GrabPay merchants, allowing its users to use USDC and USDT stablecoins by scanning SGQR codes. That followed the launch of StraitsX’s XSGD stablecoin on the Coinbase exchange.
The Monetary Authority of Singapore in October also announced a new initiative to extend settlement capabilities offered by financial institutions.
Grab and StraitsX added that their partnership will also take into account the “continuously evolving nature of money-laundering and terrorism-financing typologies” and ensure that such risks introduced from this integration are properly mitigated.
Through this partnership, subject to adherence to regulatory requirements, Grab users may be able to hold and transact with stablecoins such as XSGD and XUSD, a USD-backed stablecoin also issued by StraitsX.
The new Web3-enabled payment layer aims to solve some of the region’s “most entrenched inefficiencies”. It will act as a one-time integration layer, transforming a “patchwork of country-specific and method-specific systems” into a single, interoperable framework.
“Today, South-east Asia’s payments remain costly and siloed, with merchant-card payment fees for credit cards and other payment methods significantly higher than those on real-time payment rails,” said the press statement, citing Payments and Commerce Market Intelligence data.
The new partnership will instead allow users to transact across borders with real-time, foreign exchange-transparent cross-border settlement.
Meanwhile, merchants will enjoy “new liquidity and capital management efficiencies” through programmable settlement features and on-chain treasury tools.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
