DISCLAIMER: SGDR IS NOT A PRODUCT LICENSED OR REGISTERED UNDER THE SINGAPORE SECURITIES AND FUTURES ACT (SING CAP. 289) (“SFA”) AND IS NOT GOVERNED BY ANY PROSPECTUS REQUIREMENTS THEREIN.
THE MATERIAL CONTAINED IN THIS ARTICLE IS FACTUAL AND FOR INFORMATION ONLY AND SHALL NOT CONSTITUTE OR BE CONSTRUED AS AN ADVERTISEMENT OR AN OFFER TO SELL.
THE INFORMATION PROVIDED HEREIN IS INTENDED FOR ACCREDITED, EXPERT OR INSTITUTIONAL INVESTORS ONLY (AS DEFINED IN THE SFA).
What is SGDR and why was it essential to create it?
SGDR is a 1:1 Singapore dollar-backed stablecoin, guaranteeing users full redeemability for Singapore dollars on demand. A stablecoin is defined as a “price-stable crypto-asset”, providing the technological benefits of cryptocurrencies minus the price volatility. These benefits include low costs, fast transaction speeds, 24/7 settlement of funds, fractional ownership and programmability — all necessary attributes required to serve the needs of smart cities of the future (with Singapore very much included!).
Who are the targeted users of SGDR?
During the near-term we expect SGDR to be used for trading and hedging purposes for their digital asset portfolios.
Further down the road, we foresee more complex uses — such as micropayments, event-driven payments and even machine-to-machine payments between autonomous IoT devices — fully tapping on the potential of the technology behind SGDR and powering new innovative business modelswhich are not economically viable presently.
Which exchanges are SGDR listed on?
SGDR will be made purchasable directly through the issuer. This initial closed-beta launch of SGDR will be catered towards just accredited, expert, or institutional investors as defined in the Singapore Securities and Futures Act only. Therefore SGDR will not be listed on exchanges without a Recognised Market Operator (“RMO”) license, which most popular cryptocurrency exchanges out there today do not possess.
How does SGDR differ from other stablecoins (live and in-development)?
SGDR has numerous unique attributes which adds up to it being a unique offering as compared to other stablecoins in the market.
SGDR is backed by Singapore dollars — one of only eleven countries worldwide with a ‘AAA’ sovereign credit rating by Standard & Poor’s as of 2018 (not even the U.S. is on the list).
All Singapore dollars are managed under an escrow account controlled by an independent MAS-licensed trust company with 10 years of experience, thus offering token holders concrete guarantees around the 1:1 redeemability of SGDR for Singapore dollars. This arrangement will at a later date evolve into a full legal trust, with the trustee undertaking fiduciary duties in ensuring token holders have legal beneficial ownership of the Singapore dollars as represented by their SGDR token holdings.
SGDR tokens are designed to be ultimately compatible with both the Ethereum and Stellar public blockchain eco-systems, allowing it to harness the best of both blockchain worlds — Ethereum’s deep network effects and programming flexibility, as well as Stellar’s fast and ultra-cheap transactions.
Why would you use a trust system?
Creating an independent trust under the care of a MAS-licensed trustee ensures that the Singapore dollar assets are never within the control of the issuer at all. Instead, all Singapore fiat dollars are held under an independent, legally-enforceable third-party trust structure, with all beneficial ownership rights to it belonging to the token holders. Auditors and financial regulators will be able to conduct regular checks on the trust and the underlying assets.
What steps have been taken to ensure the redeemability of SGDR?
All Singapore dollars are held in an escrow account that is managed by an independent trust company based out of Singapore that has been operating with a trust license issued by the Monetary Authority of Singapore since 2008.
We are working with RHT Taylor Wessing as our advisor on all legal matters.
Monthly reports attesting to the amount of Singapore dollars held in the bank account will be performed by the trust and made available to token-holders.
How will the price of each SGDR token stay matched to the Singapore dollar?
Confidence in the value of each SGDR token is maintained through the provision of transparent redeemability (for Singapore dollars) guarantees. Each SGDR token is fully-collateralized by Singapore dollars in the trustee’s escrow bank account, with monthly attestation reports shared with token holders. The trustee will ensure that all SGDR tokens can only be purchased with or redeemed for SGD on a 1:1 basis. Therefore, any fluctuations in this valuation will be temporary as it will present an opportunity to arbitrage traders to make a quick trading profit.
Is the smart contract code for the SGDR token audited and open-sourced?
Why is there a need for KYC as well as other controls?
Most governments and regulators around the world have yet to formulate a definitive stance pertaining to crypto-assets due to the complexity of all things involved. When national money is concerned, many governments will also be concerned over its impact on existing anti-money laundering safeguards. In this regard, having primary buyers of SGDR be associated with a KYC-ed identity allows it to be easily compliant with any regulatory demands. These KYC requirements will be reviewed as and when the stance of regulators changes over time. This is also the same reason for there being certain fail-safe measures within the smart contract code to abide by regulatory orders (e.g. to suspend transfer of funds meant for illicit purposes), which can only be implemented after a dual-signatory process involving the issuer and the trustee.
What is the revenue model for SGDR?
In order to sustain operational costs, a small fee may be levied on all SGDR purchase and redemption transactions.
What is the relationship between SGDR and the Rate3 Network?
SGDR is the first asset to leverage the Rate3 Network’s tokenization and identity management protocols. These protocols allow for a) Singapore dollars to be tokenized and be placed onto public blockchains within a well-established trust law framework, and b) for a KYC-ed identity to be linked with primary purchasers of SGDR, in order to stay compliant with regulatory requirements.
SGDR is a programmable form of money designed for smart economies of the future. It helps bring to the masses the benefits of cryptocurrency minus the price volatility. By leveraging its programmability, low costs and high speeds, applications can transfer value in a cheaper, more innovative and more interoperable fashion, allowing for new payment models for businesses to become possible.
About Rate3 Network
Rate3 is a decentralised dual protocol for cross-chain asset tokenization and identity management. The Rate3 Tokenization Protocol is an end-to-end protocol for tokenization on both Ethereum and Stellar, while the Rate3 Identity Protocol is a protocol to create and manage a unified cross-chain identity.
SGDR Website: https://sgdr.io/
Rate3 Network Website: https://rate3.network