A Thriving Onchain Ecosystem led by stablecoins, DeFi making new highs
- Onchain, we’re witnessing a significant revival in stablecoin adoption. The total supply of stablecoins has now surpassed its 2021 peak, reaching a new high of [$196 Billion] today.
- Furthermore, there’s been a noticeable shift in the diversity of stablecoins in circulation, with the dominance of the two largest – USDC and USDT, decreasing by approximately 10% since the previous cycle.
- Moreover, there has been a noticeable shift in diversity, with the market share of the two leading stablecoins, USDC and USDT, diminishing by about 10% from 2022, indicating healthier market competition.
- Decentralised Finance or DeFi, has also seen a significant uptrend since the lows, with Total Value Locked (TVL) surging more than 250% since 2023. Today, the TVL across all protocols stands at US$124B, with transfer volumes returning close to all-time-highs.
Keeping up with Web3’s Evolution: More Utility, More Transactions
- Bitcoin and Ethereum Upgrades
- Other Blockchains are breaking into the “Blue-Chip” Category
- Stablecoin innovation driving practical use cases
- Web3 shows promising synergies with Artificial Intelligence, IOT
Greater Trust in Crypto From Singaporean Companies
- Local Superapp Grab pilots Web3 wallet and stablecoin deposits
- AXS allows bill payments in digital currencies at over 650 stations islandwide
- Accredify leverages Distributed Ledger Technology, empowering travellers to prove they are virus-free
- DBS launches launch crypto options trading and structured notes for institutional investors and wealth clients – the first Asian-headquartered bank to do so
- Suntory’s Web3 Singapore team launched an anti-counterfeit blockchain pilot on Avalanche, providing customers a “certificate of consumption” NFT when they would open their limited edition Premium Malt beer bottles.
Improving the Road Ahead: The Builders’ Wishlist
- Regulatory Clarity: While Singapore has made significant progress in defining regulations for digital assets and Web3 — such as introducing the Stablecoin Regulatory Framework in August 2023 and implementing user protection requirements for Digital Payment Token (DPT) service providers in April 2024 — Web3 companies believe there is still more to be done. Despite these advancements, businesses continue to call for greater clarity to support compliance and foster innovation locally.
- High Cost of Compliance: Applying for the DPT licence in order to be able to legally offer services related to digital payment tokens, is generally considered to be a resource-intensive and expensive endeavour for Web3 companies.
- Limited Access to Services: These limitations pose significant barriers for Web3 companies, particularly those in the early stages of development, as they rely on these services to ensure operational stability and regulatory compliance.
- A Call for Collaborative Environment: Our surveys also indicated a lack of familiarity or dissatisfaction with grants and other government support for Web3 companies.
- Regulatory Collaboration: Survey participants emphasised the importance of establishing a forum where Web3 companies can directly engage with policymakers. This initiative is crucial for policymakers to stay agile with the rapid innovation in the Web3 ecosystem. Despite innovation stemming from startups, their unique challenges and needs are often overlooked by policymakers.
Link to article: https://www.onchainstate.sg