Sunday 28 November 2021

How much fiat cash VS stablecoins are you holding? | How my allocation is

I saw an a great article by Investment Moat recently on stablecoins where he broke down the different types and the risks involved. I found it a very interesting topic as the interest rate is really much more attractive compared to the traditional banks. How much of your portfolio are you holding fiat and are you moving them to stablecoins? I started asking myself this after seeing how stablecoins are earning a huge interest compared to fiat. Of course, this is not a recommendation for any actions as there are certain advantages to holding fiat as well considering the primary medium of exchange for goods are still in fiat. I am sharing more of my experience and what I plan to do on my allocation.

Why hold fiat?

Holding fiat and having liquidity for it is important as it is still what we use on a daily basis for purchase of food, necessities and paying our bills. It's still very important to have a certain amount of fiat depending on your circumstances for example if you have a family that depends on you or if you have mortgages and debts to pay, you will need a larger pool of fiat available for usage.

We usually hold our fiat in banks for example in SG we usually have them in DBS/POSB/OCBC or UOB. In Singapore, your deposits are insured by the Singapore Deposit Insurance Corporation, for up to S$75,000 in aggregate per depositor per Scheme member by law.

In the event a Deposit Insurance (DI) Scheme member bank or finance company fails, all of your insured deposits with that member are aggregated and insured up to S$75,000 by the Singapore Deposit Insurance Corporation Limited (SDIC). - Taken from

I am sure you have heard of concerns over inflation and the Fed printing money. Chicken Genius has also mentioned in his recent video on the increase of money in the system know as M1, the M1 money supply is composed of Federal Reserve notes—otherwise known as bills or paper money—and coins that are in circulation outside of the Federal Reserve Banks and the vaults of depository institutions. Paper money is the most significant component of a nation’s money supply. From 2020, there has been an exponential increase in the M1 supply.

Hence some say to invest your money especially since the supply of fiat is increasing at such a rapid pace, your fiat will in the long run decrease in value and investing it allows you to keep up or even grow your money. I do make sure that I have enough fiat on hand for my daily necessities and 6 - 12 months expenses or salary depending on your circumstances, for me, I keep 6 months of expenses in my bank and for the rest, I invest them.

Why hold stablecoins?

I came across the term stablecoins when I started dabbling in cryptocurrencies in late 2020 but I didn't really hold stablecoins until I came across Hodlnaut which pays me interest on the stable coins.

Read more: An Interest Account for your Cryptocurrencies | Earn up to 10.5% APY | Why I have decided to move my crypto

I hold fiat-backed stablecoins (USDC) because I already have an emergency fund built up and also some cash being saved up monthly. With the excess fiat, changing it to stablecoins allows me to earn a much higher interest than leaving it in the bank however I like to emphasize that stablecoins are not insured by the SDIC and carry some form of risks. Stablecoins are cryptocurrencies that attempt to peg their market value to some external reference. They maybe pegged to the USD (USDT or USDC), achieving price stability via collateralization or through algorithmic mechanisms of buying and selling the reference asset or its derivatives.

Stablecoins are being scrutinized by the regulators as they are growing and impacting the financial markets however there is currently no controlling authorities to intervene and manage the demand and supply of currency to maintain price stability. They do not have a central authority to control prices when required hence to individuals with a low risk perception, they seem more dangerous.

I hold stablecoins in Hodlnaut and Celsius to earn interest and at the same time to buy the dip when there is, Hodlnaut allows for 1 withdrawal a month once your account has been set up for 30 days otherwise a withdrawal fee applies when you withdraw but using the token swap allows you to buy within the whole ecosystem with no extra fees which I love.

Also, being exposed to yield farming which I mentioned in my previous video/article has also made me convert more cash into it. It's been a new experience and I am still learning along the way.


As I build up my cash position, I am also putting the extra into fiat stablecoins (mostly USDC) and to be honest, I always end up swapping it for ETH (itchy fingers!) so the stablecoin positions is always moving because I always think in terms of ETH growth and it is more worth it to be holding ETH than stablecoins. But I like the alternative that stablecoins provides to fiat. Of course, fiat and stablecoins are not equally the same and you need to figure out the most comfortable allocation for yourself. Hope you guys enjoy my content. Thank you.

You can also find me on

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  1. how do you withdraw USD (fiat) from your celsuis or hodlnaut account ? assume to DBS MCA .

    1. Hi, so far I have not cashed out my stablecoins into fiat as it remains in the ecosystem (eg. earning interest or buying the dips). I know that you can cash it out via Gemini or FTX however there might be fees involved. Unless it's a substantial amount or if you need it urgently, I think it is better to hold it.

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