September 17, 2025 — Global Release
The World Blockchain Association (WBA) has released an in-depth analysis on the state of non-USD stablecoins across Southeast Asia (SEA) during the second quarter of 2025, highlighting both the transformative potential and the underlying challenges of these digital assets. With stablecoins increasingly integrated into Cryptocurrency, DeFi, Web3, Tokenization, and cross-border settlement ecosystems, the findings underscore their role in fostering financial inclusion while revealing the urgent need for regulatory clarity and resilient infrastructure.
Key Findings
- XSGD dominates the market: As the only Singapore dollar–pegged stablecoin, XSGD continues to lead in issuance and adoption, supported by strategic partnerships with Grab and Alibaba.
- Diverse blockchain footprint: Non-USD stablecoins now operate across more than eight EVM-compatible chains, supported by eight issuers and linked to five local currencies.
- Trading activity declines: DEX trading volumes fell to $136 million in Q2, a sharp 66% decline from Q1’s $404 million, though Avalanche and Polygon remain dominant settlement layers.
- Regulatory momentum: The Monetary Authority of Singapore (MAS) advanced its stablecoin regulatory framework, while Indonesia and Malaysia rolled out sandbox pilots to test local issuance.
- Cross-border trade opportunity: Stablecoins pegged to regional currencies are seen as key to reducing dependence on the U.S. dollar, which currently accounts for the majority of settlement costs and delays.
- Financial inclusion gains: Over 260 million unbanked people in SEA could gain access to affordable payment solutions through stablecoin integration into super-apps like GoPay (Indonesia) and MoMo (Vietnam).
Southeast Asia’s Digital Economy Context
Southeast Asia, with a combined GDP of $3.8 trillion, a population of 671 million, and over 440 million internet users, is the world’s fifth-largest economy and a leading hub of digital transformation. This rapid shift has positioned stablecoins—particularly those linked to local currencies such as the Singapore dollar (SGD), Indonesian rupiah (IDR), and Philippine peso (PHP)—as critical tools to enhance trade efficiency, lower remittance costs, and expand Cryptocurrency and Web3 adoption.
According to the World Blockchain Association, these developments highlight the importance of Stablecoins, DAOs, and Tokenization in driving inclusive financial growth across emerging markets.
Adoption Trends: Stablecoins Beyond the U.S. Dollar
Since 2020, Southeast Asia has witnessed a dramatic expansion of non-USD stablecoins, growing from just two projects to eight by mid-2025. Q2 alone recorded 258,000 transactions, with SGD-backed stablecoins (primarily XSGD) commanding 70.1% market share, followed by IDR-linked tokens (IDRT, IDRX) at 20.3%.
“Non-USD stablecoins are no longer experimental—they are embedded in the region’s financial fabric,” the World Blockchain Association reports. “They play a dual role: facilitating everyday payments while reducing systemic dependence on the U.S. dollar in cross-border commerce.”
Network Distribution: Avalanche, Polygon, and BSC Lead
Blockchain choice has played a decisive role in adoption. In Q2 2025:
- Avalanche captured 39.4% of market share (101,000 transactions), fueled primarily by the XSGD project.
- Polygon followed with 32.5% (83,000 transactions), benefiting from strong DeFi integrations.
- Binance Smart Chain (BSC) accounted for 10.9% (28,000 transactions).
The dominance of Avalanche illustrates how stablecoin projects gravitate toward chains offering scalability, liquidity, and composability within the DeFi and NFT economy.
Wallet Adoption and User Engagement
Active addresses for stablecoin transactions exceeded 10,000 in Q2, with 5,743 new users joining the ecosystem. Polygon held the largest share of wallet activity (39.2%), followed by BSC (23.1%) and Avalanche (10.1%).
This steady expansion signals growing trust and user participation. The World Blockchain Association points out that integration into super-app wallets has proven decisive: once embedded into payment ecosystems such as GrabPay, GoPay, and MoMo, stablecoins effectively bridge the gap between Web3 financial rails and everyday consumer use.
DEX Activity and Settlement Patterns
Decentralized exchange (DEX) volumes in Southeast Asia’s stablecoin markets experienced volatility:
- Total DEX volume dropped to $136 million in Q2, compared to $404 million in Q1.
- Avalanche led with $69 million in activity (51%), followed by Polygon ($45 million, 33%) and Ethereum ($12 million, 9%).
- By currency, SGD-denominated trades represented 93.1% ($127 million), underscoring Singapore’s leadership in the region.
Despite the short-term decline, WBA notes that these shifts reflect a broader migration toward high-throughput, low-fee blockchains better suited for DeFi and DAO-based ecosystems.
Opportunities for Growth
- Cross-Border Trade Efficiency
Currently, only 22% of SEA’s trade occurs within the region, with most transactions still settled in U.S. dollars. This reliance incurs delays of up to two days and high transaction fees. By enabling instant, low-cost transfers, regional stablecoins can reduce costs and support ASEAN’s initiative for QR code-based cross-border settlements. - Financial Inclusion for the Unbanked
With 260 million unbanked residents, stablecoins offer an accessible entry point into the financial system. When integrated into widely used apps, they enable low-cost remittances, micro-transactions, and digital payments, addressing gaps left by traditional banking. - Integration with Web3 Infrastructure
Non-USD stablecoins are becoming foundational to DeFi lending, NFT marketplaces, and DAO treasury management, further embedding them into the digital economy.
Challenges Ahead
- Regulatory Fragmentation
Regulatory frameworks differ across the region. Singapore leads with a structured framework from MAS, while other nations remain cautious or fragmented. Lack of coordination increases compliance costs and may hinder regional scalability. Recommendation: Policymakers should establish a harmonized framework on licensing, consumer protection, and anti-money laundering (AML) standards. - Currency Volatility and Peg Stability
Stablecoins pegged to regional currencies face inherent risks from exchange-rate volatility. Weak reserve management could undermine confidence. Recommendation: Issuers must ensure fully collateralized reserves, independent audits, and diversified currency baskets to mitigate risk. - Cybersecurity and Infrastructure Gaps
Uneven digital infrastructure across SEA, coupled with cyber risks, may expose users to fraud or systemic vulnerabilities. Robust security standards are essential.
The WBA Perspective
“The evolution of local stablecoins in Southeast Asia highlights the dual forces of innovation and caution shaping the blockchain economy,” the World Blockchain Association reports. “While these assets promise efficiency, accessibility, and independence from dollar dominance, their sustainability depends on sound governance, strong reserves, and cross-border regulatory cooperation.”
The WBA also emphasized that Bitcoin, Ethereum, DeFi platforms, NFT integration, DAOs, and Tokenization all contribute to this transformation by anchoring stablecoins within a broader Web3 ecosystem that links finance, trade, and digital identity.
Conclusion
Q2 2025 demonstrates that Southeast Asia’s non-USD stablecoin market is gaining traction but remains in transition. With XSGD leading adoption, Avalanche and Polygon enabling scalable settlement, and regulators experimenting with frameworks, the foundations for a regional digital financial ecosystem are being laid.
Yet, the sharp contraction in trading volume and the persistence of regulatory uncertainty underscore the need for a cautious, coordinated path forward. If managed effectively, non-USD stablecoins could enhance regional trade, support inclusive finance, and establish Southeast Asia as a global model for digital monetary innovation.
About the World Blockchain Association
The World Blockchain Association (WBA) is a global organization dedicated to advancing knowledge, policy dialogue, and innovation in blockchain and digital finance. As a leader in the blockchain and cryptocurrency space, the WBA provides stakeholders with trusted insights at the intersection of technology, regulation, and global economic trends through research, reporting, and thought leadership.
Website: WorldBlockchainAssociation.org
Email: TheWorldBlockchainAssociation@gmail.com
