Standard Chartered has partnered with Singapore stablecoin issuer StraitsX to provide cash management and custody services for two of its stablecoins in Singapore dollars and US dollars.
StraitsX provides the most popular Singapore dollar stablecoin XSGD and has been involved in numerous trials run by the Monetary Authority of Singapore (MAS), including for purpose bound money (PBM). This is where a stablecoin is wrapped with permissions so it can only be used to pay certain organizations. One of the ideas is to use it for kids pocket money.
The startup is also licensed by MAS as a major payment institution.
While stablecoins are well proven in the crypto sector, they also have various use cases for mainstream payments, particularly cross border payments.
From a business perspective, stablecoins can be an opportunity for banks. Even if most reserves are held in government bonds, stablecoin issuers usually hold significant cash balances. Plus, the banks can provide custody for the bonds.
Standard Chartered is leaning into the sector in a big way. It already provides similar services to Paxos for its stablecoins issued outside the United States. Apart from issuing several of its own stablecoins, Paxos was the issuer of the Binance stablecoin and is the issuer of PayPal’s PYUSD.
Additionally, yesterday Standard Chartered confirmed that it’s launching a joint venture to become one of the first stablecoin issuers in Hong Kong alongside Animoca Brands and Hong Kong Telecom.
“This partnership further expands Standard Chartered’s wide-ranging involvement across the digital asset ecosystem, reinforcing our role in supporting responsible growth within the industry as well as the bank’s regard for digital assets as an important and permanent part of the future of financial services,” said Luke Boland, Head of Fintech, Asia at Standard Chartered Bank.
