Stablecoins are cryptocurrencies that are pegged to a specific asset, such as the US dollar or gold, to reduce volatility. Stablecoins like XSGD and USDC have become increasingly popular in the cryptocurrency market as they offer users a stable store of value that can be used for transactions, trading, and hedging against market volatility.

However, even stablecoins are not immune to risks. For instance, the value of the US dollar can fluctuate against other major currencies, which can affect the value of stablecoins pegged to it.

‍What are XSGD and USDC?

XSGD is a Singapore dollar-pegged stablecoin that is issued by StraitsX, a blockchain-based payments platform. It is backed 1:1 by Singapore dollars held in a licensed local bank, ensuring that its value is stable and secure. XSGD can be used for transactions, trading, and hedging against currency risks.

USDC is another popular stablecoin that is pegged to the US dollar. It is issued by Circle, a blockchain-based payments platform, and is backed by a reserve of US dollars and US dollar assets held in segregated bank accounts. USDC has gained popularity as it is widely accepted by exchanges and merchants, and can be used for peer-to-peer payments and trading.

Hedging against stablecoin risks with Swap features

While stablecoins like XSGD and USDC are designed to be stable, they are still subject to risks such as exchange rate fluctuations, credit risk, and market volatility. One way to hedge against these risks is by diversifying your stablecoin holdings across multiple stablecoins.

Today, StraitsX Swap offers users the convenience of exchanging part or whole of their stablecoin assets for other stablecoin assets at a fixed exchange rate. For example, a user can exchange XSGD for USDC, or vice versa, at a rate that refreshes every minute. This can help users easily diversify holdings across multiple stablecoin currencies, and hedge against exchange rate fluctuations to protect their investments.

To use Swap, users need to have a verified account with StraitsX and have sufficient funds in their wallets to make the exchange. The process is simple and can be done in a few clicks. Once the exchange is complete, the new stablecoins can be used for transactions, trading, or held as a hedge against currency risks. Additionally, users can easily offramp their stablecoins to SGD via the dashboard or to USD via the StraitsX OTC desk, providing greater flexibility in managing their funds.

Benefits of using StraitsX Swap

StraitsX Swap offers several benefits, including:

1. Protection against currency risks: By hedging with Swap, users can protect their investments against currency risks and exchange rate fluctuations.
2. Diversification of holdings: By holding different stablecoins, users can diversify their cryptocurrency holdings and reduce their exposure to any single asset.
3. Convenience: Swap is a convenient and easy-to-use feature that allows users to exchange cryptocurrencies quickly and securely.

Start Swapping Today

By using Swap features offered by StraitsX, users can hedge against these risks and protect their investments.

Here is how to get started with swapping between XSGD and USDC:

1. Sign up for a StraitsX Personal Account or StraitsX Business Account.
2. Upload the required documents to verify your identity.
3. Make a Transfer In from your bank account to mint XSGD.
4. Swap your XSGD with USDC or vice versa.
5. Create your own non-custodial wallet with our partners to Transfer Out your XSGD or USDC, or you can also deposit USDC directly from your blockchain wallet into StraitsX.

Note: If you are a high net worth individual, or institution, you can also take advantage of StraitsX’s OTC Desk feature that offers deep liquidity and OTC block trades.‍

StraitsX and our DeFi partners are specially catered to our Singaporean users with our native support of XSGD. This allows our regional investors to trade in their home currency to minimise transaction fees and slippages, instead of, traditionally, with the US Dollar (USD) that carries conversion fees.