By Ong Bo Yang
Stablecoins are becoming more widely adopted beyond cryptocurrency trading, with a growing role in the global financial system.
The total market supply of stablecoins has risen from US$6.8 billion in 2020 to US$273 billion in 2026. Meanwhile, adjusted stablecoin transaction volume reached US$10.9 trillion in 2025, reflecting their growing use across cryptocurrency markets and payment networks.
The 2025 Global Crypto Adoption Index shows strong cryptocurrency activity in Southeast Asia, with Indonesia, Vietnam and the Philippines among the leading countries in adoption.
Stablecoins are digital currencies designed to maintain a relatively stable value by being pegged to an asset, usually a fiat currency such as the US dollar.
Stablecoins aim to speed up digital transactions while avoiding the sharp price fluctuations commonly associated with cryptocurrencies such as Bitcoin.
Stablecoins pegged to the US dollar, including Tether, dominate the international stablecoin market, accounting for approximately 98% of the total.
Nevertheless, Standard Chartered expects stablecoins pegged to other local currencies to gain popularity in markets where financial services remain inefficient, including Southeast Asia.
Remittance providers are exploring local currency-backed stablecoins to facilitate faster transfers, particularly along payment routes from Hong Kong and the Middle East to the Philippines.
These stablecoins allow payments to be settled at any time, while enabling direct currency exchanges without going through the US dollar.
The Philippines’ central bank, Bangko Sentral Ng Pilipinas, is reportedly piloting a peso-backed stablecoin to facilitate remittance flows, while maintaining adequate foreign-exchange liquidity is difficult.
Regulatory Developments Across Southeast Asia
On 1 September 2026, the Monetary Authority of Singapore (MAS) published a consultation paper outlining proposed changes to the Payment Services Act to strengthen Singapore’s regulatory framework for stablecoins.
Under the proposed framework, only stablecoin issuers licensed by MAS would be allowed to describe their tokens as “MAS-regulated stablecoins”.
This would make it easier for users to identify stablecoins that meet MAS requirements, rather than confusing them with other cryptocurrencies marketed as stablecoins but without the same regulatory safeguards to maintain their value.
The proposed rules would require stablecoin issuers to preserve the value of their tokens, maintain sufficient capital, permit holders to exchange their tokens for their original value and disclose necessary details to users.
MAS is also gathering views on other aspects of stablecoin regulation, including further steps to safeguard financial stability and strengthen consumer protection.
Stripe is involved in Project Bloom, a MAS initiative that explores how tokenised bank liabilities and licensed stablecoins can be used to settle transactions.
The project covers payments within Singapore and across borders, supports different currencies and includes wholesale transactions.
Stripe believes stablecoins could have a significant impact on the financial services industry in Singapore.
By working with the Singapore government, the company hopes to make these developments more accessible to local businesses instead of limiting their growth mainly to the US market.
The introduction of RMJDT in December 2025, a stablecoin backed by the Malaysian ringgit, has drawn attention to the growing role of currency-backed digital tokens in Southeast Asia.
However, analysts believe the initiative remains at an early stage, with its adoption by the wider financial sector likely to be gradual.
The token is still being tested under a controlled trial programme, where Bank Negara Malaysia and relevant authorities will assess it before deciding whether it can be introduced for broader public access and investment.
However, analysts noted that public trust, clear legislations and confidence in the organisations behind stablecoins remain major barriers to wider acceptance.
Stronger regulation by central banks and financial authorities, together with the ability to work with existing payment and currency exchange networks and access to sufficient liquidity, will influence whether stablecoins such as RMJDT can expand beyond the testing stage.
The Bank of Thailand (BoT) is developing legislation for a stablecoin backed by the Thai baht, as Thailand continues to move towards digital finance.
Bank of Thailand Governor Vitai Ratanakorn said the review of the Thai baht-backed stablecoin design is almost complete, with a public consultation likely to take place in the next few months. The regulations are likely to be completed by the end of 2026 or in early 2027.
The initiative is part of Thailand’s long-term efforts to develop its financial infrastructure.
The Thai baht-backed stablecoin is intended mainly for payments, rather than for speculative trading.
Its aim is to make transactions more efficient and improve the overall functioning of the financial system, instead of serving as an investment product.
Financial Crime Risks and Consumer Protection
Despite the benefits of stablecoins in making digital payments faster and more efficient, the downside of stablecoins is that they can be used for illegal activities.
According to Goldman Sachs, these digital currencies can enable funds to move outside traditional US banking channels and be transferred between different cryptocurrency markets.
A detailed investigation by Chainanalysis approximated that stablecoins were involved in US$25 billion worth of illegal financial activities in 2024.
These concerns have led regulators and financial institutions to place greater emphasis on compliance, sanctions enforcement and transaction monitoring.
Although stablecoins present financial crime risks, the transparency of public blockchain records could help authorities trace transactions and improve accountability.
It is also important for regulators to ensure the financial viability of stablecoin issuers.
In its September 2026 consultation paper, MAS proposed additional measures to strengthen the regulation of stablecoin issuers.
These include regular stress tests, plans to recover from business disruptions or wind down operations in an orderly manner, and the ability to trace, freeze or burn stablecoins associated with illegal activities.
MAS also proposed requiring issuers to hold additional capital, liquidity or reserves if stress tests identify serious weaknesses.
These measures are intended to protect consumers, address financial crime risks and prevent problems involving stablecoin issuers from spreading to the wider financial system.
Thank you.
Yours sincerely,
Ong Bo Yang has written for more than 10 top Southeast Asian newspapers including Bangkok Post, CNA, Daily Inquirer, Malaysiakini, The Jakarta Post, VNExpress. He is presently an Internal Auditor working in a Malaysian Bank, reviewing credit card and SWIFT audits, and analysing financial fraud.
Portfolio: https://linktr.ee/aseanwriter
