Does launch of ringgit-backed RMJDT signal rise of stablecoin adoption in Southeast Asia?

JOHOR BAHRU: The launch of a ringgit-backed stablecoin last month by a private company chaired and owned by Johor Regent Tunku Ismail Sultan Ibrahim has renewed attention on how these currency-backed tokens are increasingly coming to the fore and could potentially reshape digital payments in Southeast Asia.  

Analysts told CNA that the stablecoin - known as RMJDT and pegged to the Malaysian ringgit - remains in an early and experimental phase, with integration into mainstream financial systems likely to be gradual.

The token is issued by Malaysia telecommunication firm Bullish Aim, which is chaired and owned by Tunku Ismail. 

It is currently not available for general public use and direct investment as it is operating under a regulatory sandbox - a testing ground where Malaysia's central bank Bank Negara and other regulators will monitor before it is permitted for wider use, according to a report by local financial blog RinggitPlus. 

However, the analysts noted that RMJDT’s emergence - alongside other regional initiatives such as StraitsX which is licensed and regulated by Singapore's central bank - reflects a broader global trend in which stablecoins are increasingly seen as a potentially cheaper and faster alternative to traditional cross-border bank transfers.

Experts said RMJDT could be particularly useful for Malaysian companies engaged in international trade, as well as foreign workers in Malaysia who remit money to their home countries.

Despite this, analysts cautioned that concerns over legitimacy, regulatory clarity as well as institutional confidence remain key barriers to widespread adoption - challenges they said that could only be addressed through clearer oversight by central banks and financial regulators in the region.

“It is still early days for stablecoins in Southeast Asia,” said real estate consultant and urban economist Tan Wee Tiam, executive director at Johor boutique firm Olive Tree.

“The real impact will depend on adoption. Regulatory acceptance, integration with existing payment and foreign exchange systems, and sufficient liquidity will determine whether stablecoins like RMJDT can scale beyond pilot use cases.”

WHY ARE STABLECOINS BECOMING MORE POPULAR? 

Stablecoin is a type of cryptocurrency designed to maintain a stable value by being pegged to fiat currencies, or government-issued money like the US Dollar or Euro, as well as to commodities held in reserve.

Its popularity is growing rapidly - with its market size or value expanding from US$200 billion at the start of 2025 to US$300 billion by late 2025, according to projections by Citibank. 

The bank added that this is expected to balloon to US$4 trillion by 2030, depending on regulatory developments and institutional adoption.

According to reports, the stablecoin transaction volume in 2024 was more than US$27 trillion, exceeding the combined volumes of legacy players like Visa and Mastercard. 

Transaction volume of stablecoins is bigger than their market value as they can be used multiple times.

Financial experts told CNA that stablecoins can significantly reduce the cost and time needed for cross-border transfers. Traditional bank transfers via the SWIFT network can take several business days and incur fees of 2 to 4 per cent of the transaction value, excluding currency conversion costs. 

In contrast, stablecoin transfers can be settled within minutes and typically cost less than 1 per cent of the transaction value end-to-end.

Stablecoins, the experts said, are also less volatile than other cryptocurrencies such as Bitcoin, as they are designed to maintain a fixed value while transacting on blockchains that allow for faster settlement.

“Privately issued stablecoins (are) backed by often faster transaction speed, lower transaction costs, global markets access and flexibility, making them appealing for cross-border payments and blockchain-based applications,” Malaysia-based economist Lee Heng Guie, executive director of the Socio-Economic Research Centre, told CNA.  

RMJDT is pegged to the Malaysian ringgit and is reportedly backed by short-term Malaysian government bonds. Analysts said its status as a Johor royal-linked initiative could help differentiate it from other privately issued stablecoins and potentially bolster confidence among some users.

Singapore-based cryptocurrency analyst Patrick Tan of intelligence firm ChainArgos told CNA: “The ringgit is issued by Malaysia’s Bank Negara and the Johor Regent is endorsing this digital currency - this is different from (the stablecoin) simply being issued by a private company.”

Tan added that the initiative could prompt interest in similar locally pegged stablecoins elsewhere in the region, particularly as most existing stablecoins are tied to the US dollar.

Analysts pointed to Singapore’s StraitsX as an example of how regulated stablecoins can be integrated into merchant payments, though they cautioned that similar adoption in Malaysia would depend on regulatory approvals and industry buy-in.

In November, a Memorandum of Understanding was announced between StraitsX and technology firm Grab to propose integration, which will enable GrabPay merchants across major Asian markets to accept stablecoin payment. 

GrabPay is a mobile wallet that allows users to do cashless payments for Grab services and more within the Grab superapp. 

StraitsX is a Singapore-registered company and it secured its Major Payment Institution licences from the Monetary Authority of Singapore (MAS) in July 2024.

The licence allows companies to conduct significant payment activities - like cross-border transfers, digital payment tokens, e-money issuance - without facing certain transaction volume thresholds. 

Analysts told CNA that while it is still not widely used, RMJDT could also be integrated with Malaysia’s merchants and domestic payment systems like DuitNow in the future but this may take time. 

They said that for a start, the stablecoin could appeal to firms making overseas financial transactions and foreign workers in Malaysia who wish to remit money and save on remittance costs. 

“RMJDT is still at its preliminary and experimental stage. Small and medium-sized enterprises (SMEs) and businesses may test it for specific cross-border use cases. (But) widespread usage will take time,” said Olive Tree’s Tan. 

“Integration with systems like DuitNow is possible but not (in the) near term. DuitNow is designed for domestic retail payments while RMJDT is more suited for cross-border or wholesale settlement.” 

RMJDT'S CHINA CONNECTION

Analysts whom CNA spoke to added that RMJDT’s ringgit peg also makes it unusual in a market dominated by US dollar-backed stablecoins, which account for the vast majority of tokens in circulation.

Stablecoins USDC and USDT - issued by US firm Circle and offshore company Tether respectively - make up around 80 per cent of stablecoin tokens worldwide. Both are pegged to the US Dollar. 

RMJDT is also issued on Zetrix AI, a blockchain developed by Malaysian company Zetrix AI. 

Analysts told CNA that Zetrix is also interoperable with China’s national blockchain Xinghuo, which facilitates Chinese firms to transact with international partners. 

The economist Lee told CNA that the Zetrix-Xinghuo blockchain tie-up is a “strategic collaboration between Malaysia and China” to position the Southeast Asian country as a regional hub for cross-border digital finance, leveraging on Xinghuo technology and public service capabilities.

Experts maintained that the launch of RMJDT by virtue of Zetrix’s link with Xinghuo also reflects the close trading relationship between Chinese companies with the southern Malaysian state of Johor. 

ChainArgos’ Tan told CNA: “The partnership between Chinese entities (with the Johor Regent) to help with facilitating (RMJDT trading on Zetrix-Xinghuo) is no different from the state of Johor’s overall approach - that it is open for business, including with Chinese companies and conglomerates." 

He cited how various Chinese firms have been participating in infrastructure and real estate projects in the southern state, underlining how the Johor state government and the royal family have a close working relationship with Chinese partners.

Tan believes that this overall approach by RMJDT could appeal to others, including in Southeast Asia, keen on issuing stablecoins pegged to local currencies as the market is already saturated with tokens pegged to the US Dollar. 

“The US has a large home-based (stablecoin) market that is also used in Europe and South America so there are more than ample initiatives there - proximity matters as well,” he said. 

MORE REGULATIONS NECESSARY 

Analysts said that before stablecoin usage becomes pervasive in Southeast Asia, stronger regulation by regional central banks is necessary to alleviate concerns about how these tokens are considered by some quarters to be risky and unstable. 

This includes the need for central banks to establish licensing and regulation frameworks for stablecoins. 

Experts further warned that if stablecoins are unregulated, this could lead to the proliferation of illegal activities like cross-border money laundering.

Tether, the world’s largest stablecoin, has drawn controversy and criticism for not providing full, independent audits of its reserves.

In 2021, Tether and its sister company Bitifinex reached an agreement with the New York Attorney General’s Office to pay US$18.5 million to settle allegations that Tether had misrepresented its reserves and covered losses. 

The case shone a spotlight on stablecoin’s trustworthiness and regulatory scrutiny. 

However, experts maintained that Southeast Asia governments can follow in the footsteps of the likes of Hong Kong and Singapore which have strict licensing and anti-money laundering regulations. 

In May 2025, Hong Kong’s legislature passed a comprehensive Stablecoins Ordinance, establishing one of the world’s first dedicated legal regimes for fiat-referenced stablecoins. 

The regime introduces a licensing system for stablecoin issuers, rules on reserve backing and redemption, and risk management standards.

For Singapore, only stablecoins that meet requirements under a regulatory framework by the Monetary Authority of Singapore will be officially labelled “MAS-regulated stablecoins”.

These apply to single-currency stablecoins pegged to the Singapore dollar or a Group of Ten (G10) currency comprising the US dollar, the Euro, Japanese yen, British pound, Swiss franc, Canadian dollar, Australian dollar, New Zealand dollar, Norwegian krone and Swedish krona. 

To qualify, the stablecoins must have reserves that fully cover the value of tokens in circulation and issuers must publish a whitepaper explaining the rights of holders and audit results for transparency, among other conditions. 

In a recent parliamentary reply, Singapore Deputy Prime Minister Gan Kim Yong acknowledged that “well-regulated” stablecoins can play a role in making cross-border payments more efficient.

“There is growing interest by financial institutions to provide multi-currency payment and cash management solutions to corporate customers using stablecoins and tokenised deposits,” said Gan. 

However, he warned that customers should exercise care when dealing with stablecoins, especially unregulated ones. 

“Stablecoins in general are not as safe as bank deposits in Singapore, as bank deposits are tightly regulated and protected by deposit insurance,” he said. 

In spite of the risks, experts told CNA that they are sanguine that stablecoin will be a key part of the future of the region’s digital finance infrastructure. 

The economist Lee posited that the Association of Southeast Asian Nations (ASEAN) as a bloc can play a part by pushing for a more “harmonised regulatory framework” across the different central banks to facilitate a regional stablecoin cross-border payment gateway, which will smooth business and trade transactions. 

“ASEAN’s cross-border corridors are characterised by high intra-regional trade, high labour mobility, high volume of remittances and robust tourism,” said Lee. 

“This creates significant demand for efficient settlement (payment) systems, which stablecoins offer.” 

Dong He, chief economist at the Singapore-headquartered ASEAN+3 Macroeconomic research office (AMRO), told CNA that regulation should be synergised across different countries for better uniformity. 

"Although regulators globally have begun converging on core prudential requirements, divergences persist across key areas, raising the risk of cross-border inconsistencies and regulatory arbitrage," said He. 

He also called for central banks to ensure that stablecoin issuers hold 100 per cent reserves in "high quality" liquid assets - ideally central bank money or short-term government securities. 

"For these instruments to be safe for widespread use, the regulatory bar must be set exceptionally high," the economist stressed. 

Meanwhile, Tan of Singapore firm ChainArgos stressed that the growing demand for stablecoins is an indication that the token is here to stay for the long term. 

“Despite Tether’s chequered past, it is still being used widespread today. If the risk is managed and (security, safety and assurances) are given, people will opt to use it … and it has reached a critical mass,” said Tan. 

“These stablecoins (including RMJDT) have their own unique product offerings, and it's possible in the future that users will transact (across the different types), much like how some users today have credit cards from different banks to maximise credit card points.”