[Commentary] Asia’s Dollar-Free Stablecoins Could Reshape the FX Order

Asia’s foreign-exchange market has long underpinned the global financial system. Korean companies settle payments with Chinese suppliers, Japanese trading houses pay partners in Vietnam, and Southeast Asian workers send money home to support their families. All of it runs on FX infrastructure. According to the Bank for International Settlements, average daily global foreign-exchange turnover reached $9.6 trillion in April 2025. Nearly 30% of that flowed through Asia’s major FX hubs.

The problem is that the system supporting those vast flows still rests on a structure built decades ago. There was a time when sending a text message cost extra if it exceeded a character limit. That now feels inefficient and outdated. Finance still operates in much the same way. Information moves in real time, but money still moves slowly through correspondent banks, prefunded accounts and multiple currency-conversion steps. Even transactions between Asian currencies are often routed through the US dollar as an intermediary.

A transfer from the Korean won to the yen, or from the Singapore dollar to the Philippine peso, still typically settles through a dollar hub. That creates extra conversion costs, settlement delays, operating expenses and liquidity inefficiencies. The World Bank says average global remittance costs still exceed 6%. Inefficiencies in FX infrastructure are not just a problem for financial institutions. Individuals and companies pay those costs every day. Many fintech services with modern digital interfaces still run on aging back-end financial networks, leaving the user experience up to date while the settlement structure remains stuck in the past.

Stablecoins have partly improved that system and have already grown into a market worth more than $300 billion. Blockchain-based payment infrastructure has dramatically increased the speed of money transfers and is spreading through global remittances and digital payments as a faster, cheaper option. Yet nearly 99% of stablecoins in circulation are still dollar-based. Payment technology has evolved, but the currency structure has changed little.

The next step for Asia’s financial markets is not moving dollars faster. It is direct settlement between local currencies. If regional currencies such as the won, yen, Singapore dollar and peso are issued as digital assets and can move and be exchanged directly without passing through the dollar, Asia’s FX structure could change fundamentally.

That transition, however, is unlikely to be achieved by a single stablecoin issuer or one blockchain alone. Each country has different currency and regulatory systems, payment infrastructure and operating standards for financial institutions. For local-currency stablecoins to take hold as real FX infrastructure, the market needs cooperation that connects regulatory systems, technology and liquidity discussions across jurisdictions, going beyond isolated experiments by individual countries or companies.

That is where the Asia Stablecoin Alliance, or ASA, comes in. ASA is a consultative body that brings together builders, institutions and participants in regulatory discussions to accelerate stablecoin adoption across Asia. For stablecoins to move beyond simple crypto trading tools and expand into payments, remittances, foreign exchange and tokenized-asset distribution, the market needs not only technical connectivity but also coordination across regulatory frameworks and markets. To support that effort, ASA is discussing how regulatory systems differ across Japan, Hong Kong, Singapore and South Korea, and where they can connect. It is also identifying and sharing real-world examples of adoption in payments, remittances and business-to-business settlement across Asia to help the broader market learn faster.

This year’s ASA Conference 2026 will serve as another forum for that discussion. More than 700 industry participants, including banks, institutions and asset issuers, attended last year’s ASA conference to discuss the potential of Asian stablecoins. This year, the agenda will become more specific. ASA Conference 2026 will compare regulatory environments and digital-money models across South Korea, Japan, Hong Kong, Singapore and Southeast Asia. It will also examine the conditions needed for local-currency stablecoins to expand into real payment and FX infrastructure.

At the same time, once stablecoins are adopted, the technical foundation needed to circulate and use them becomes critical. For local-currency stablecoins to be used in payments, foreign exchange and corporate treasury operations, they must be able to move across multiple blockchains and financial applications rather than remain isolated on a single chain. Interoperability infrastructure such as LayerZero can provide the foundation for that kind of asset distribution. It could also play an important role in the future use of digital assets including gold, government bonds, money market funds and tokenized securities.

If stablecoins were the first act of dollar-based payment innovation, the second act is direct foreign exchange between Asian local currencies. The competition will not end with issuing more stablecoins and tokenized assets. The real question is who will first build the financial distribution infrastructure that allows stablecoins tied to Asian currencies such as the won, yen, Singapore dollar and peso to move most efficiently across borders and networks. The shift in the FX order has already begun.

Lim Jong-gyu, Head of Asia at LayerZero