The step-by-step guide to using IBKR (or other brokers) to convert SGD to USD stablecoins

Hello, crypto fam!

Introduction

When you are just starting in crypto investing, buying and holding your preferred crypto tokens with Binance.sg or Gemini is probably the best way to get your toes wet. However, when you progress and learn along the way, you’ll eventually need to get your hands on some stablecoins. Maybe it’s for trading on Binance.com; buying more exotic altcoins on FTX or Kraken; or even participating in DeFi and NFT on other blockchains.

In my previous article, I outlined the different ways to buy USD stablecoins with SGD in Singapore, some are straightforward but some are trickier if you’re still relatively uninitiated. Today I will explain the step-by-step process of using your traditional stockbrokers to buy stablecoins.

Disclaimer: This is my current practice and it works for me, YMMV. If you have another more efficient method, please share it with me, I’m constantly looking for ways to optimize my workflow.

Here is a quick recap on why we want to use stockbrokers:

1. We can convert SGD to USD at the spot rate, saving on Forex slippage.
2. We can withdraw the USD for free, saving on fund transfer related costs (IBKR offers 1x free withdrawal per month)

These fees might appear insignificant at first glance, but they quickly add up to be a sizable cost that will eat away at your profits.

I’m going to make the guide very granular for the benefit of inexperienced readers, feel free to skip steps if you’re more advanced. I will be sharing screenshots of my own transactions to put things into perspective.

Step 1: Buy USD in IBKR with SGD

Example of a transaction which I did where I bought 50k USD with 66k SGD, a transaction fee of $2 USD

As mentioned previously, this is probably the best Forex rate you’re gonna get anywhere, the fees are also very reasonable.

Step 2: Add your Blockfi account as a withdrawal account in IBKR

Find this page of information in your Blockfi account under Fund->USD(as Stablecoin)->Via Wire

I will be using Blockfi as the crypto exchange of choice here.

Note: The name of your Blockfi account must match your IBKR account.

Step 3: Withdraw the USD from IBKR to Blockfi

The application to list Blockfi as one of the withdrawal accounts might take 2–3 working days to get approved.

The USD you’ve withdrawn will automatically be converted into GUSD, Blockfi, and Gemini’s native stablecoin.

IBKR offers 1x crypto and 1x stablecoin free of charge each month, make sure to take advantage of that. You’ll receive the funds in your Blockfi account in about 2–3 working days.

Note: If your IBKR account is a margin or portfolio account, you could actually borrow more USD than you have against your funds or equity position with margin. I do not recommend this unless you absolutely know what you’re doing.

Step 4: Withdraw the GUSD from Blockfi to Gemini

Find the GUSD deposit address in your Gemini account

Input in your Gemini GUSD address here to withdraw

Note: IMPORTANT! From this point on, you have to be very very careful when you are working with crypto addresses, you must choose the correct crypto token and copy the deposit address in its entirety. If you key in anything wrong, your funds will be lost forever!

If you’re just starting, I highly recommend doing a test withdrawal for all your transactions, i.e. if you want to transfer 1000 GUSD, transfer 50 GUSD first to test things out, yes you’ll pay the extra transaction fee of $10 USD but it’s much better than making a mistake and losing the entire 1000 GUSD.

Step 5: Convert GUSD to DAI

My transaction record of converting GUSD to DAI, use limit orders to get a good price, you might potentially get more DAI for your USD amount

First off, you’ll need to change your GUSD back to USD in Gemini first before trading to DAI.

At this stage, technically you could choose any crypto, e.g., Bitcoin. The reason why I choose DAI is it’s also a stable coin with very little fluctuations in price. If you buy BTC and transfer to another exchange, the price might potentially change before you could convert it back to USDT/USDC/BUSD in another exchange.

The key here is to switch your account type to Active Trader so that you can buy crypto with limit orders. This allows you to place an order of buying DAI at a slightly cheaper rate, hence getting more than 1 DAI per $1 USD. This is because although DAI is a stablecoin, the exchange rate still fluctuates minimally within a small range. If you just want to do this as quickly as possible then simply trade at a 1:1 rate.

Another reason to use limit orders is you get to enjoy the 0.25% maker fee, if not you’re paying a whopping 1.5%.

Step 6: Withdraw the converted DAI to your exchange of choice

Find the DAI deposit address in your desired exchange, I’m using Pionex here because I’m doing some trading here, details on this exchange will be elaborated in future articles

Note: Reminder again to double-check that you have the correct crypto token and its respective address, any error will cause you to lose all your funds.

Step 7: Sell the DAI into USDT/USDC/BUSD

Similarly, use limit orders to get filled get a good price

Again, make use of limit orders, place an order at a more than 1:1 rate and leave it there for a day or two. The additional USDT you get goes towards lowering the overall transfer fees.

Also, this step is necessary because DAI is not a very popular stablecoin, so there aren’t a lot of trading pairs with good liquidity, it’s better to switch it out for a more popular stablecoin before you do any trading.

From here on you have the USDT/USDC/BUSD you need to do all sorts of investing or trading, go knock yourself out.

Closing thoughts

Lastly, I want to remind everyone again, always check again and again to make sure you’re selecting the correct token and the correct deposit address, if you are dealing with crypto tokens that are transacted on different blockchains, double-check you have chosen the correct blockchain network.

For example, USDT could have 5 different deposit addresses based on the network you choose to broadcast your transfer on, CHOOSE THE RIGHT ONE!

Please be extra cautious when you perform crypto transfers. When it comes to blockchain transactions, nothing can be changed or reversed the moment you confirm it. Some might think dealing with crypto transactions is very dangerous without any of the safety nets that we are familiar with, but I find this finality feature of blockchain to be one of its most mesmerizing features, it’s analogous to dealing with cash: once you drop a $2 note and walk away, you lose it forever.

So don’t be afraid of doing blockchain transactions, just exercise caution and keep practicing, it will become second nature to you in due time.

Thanks for reading till this point, as always, feel free to ask any questions if you are still unclear, I’ll be more than happy to answer them.

Please also give my Twitter @SingaporeHODL a follow if you find the content useful!