- Western Union charges $15 on average to transfer $300. Stellar can accomplish the same transaction and faster for fractions of a cent.
- The global remittance (money transfer) market is worth in excess of $540 billion and has been dominated by centralized banks and money transfer services.
Stellar is designed to be a world-wide payment network that facilitates the exchange of any currency, asset or token. Its native asset, Lumens (XLM), has steadily ranked as one of the leading crypto assets in terms of market value and ecosystem support. A key focus of the Stellar network is the disruption of traditional and costly money transfer methods like Western Union.
The company was founded in 2014 by Jed McCaleb and Joyce Kim. The Stellar Development Foundation (SDF) is a non-profit organization that supports the development of the company and its ecosystem. SDF’s vision is “to build an open, global financial system that empowers people to fulfill their dreams and create opportunity for all.”
Stellar: Money without Borders
Stellar is an open network that anyone can access. It doesn’t matter where you are or what currency you have, the network makes it possible to send money quickly, reliably, and at almost no cost. Stellar is also inflation proof because a new batch of Lumens (XLM) is created each year at a fixed rate.
How Stellar Works
- Lumens (XLM), the Stellar native token plays two important roles in the Stellar network: they help prevent spam and they act as a “bridge currency” to facilitate transactions between different currencies.
- Lumens also serves as an investment store of value for those interested in accumulating Lumens tokens in anticipation of rising token prices as the network gains further adoption.
- When someone wants to make a transaction on Stellar, they first need to convert their currency into Lumens. Then, when the transaction is complete, the recipient can convert the Lumens back into their desired currency.
- Stellar allows you to create, send, and trade digital representations of any currency: dollars, pesos, bitcoin, and pretty much anything else. It is intended for all of the world’s financial systems to collaborate on a single network.
A Decentralized Currency Exchange
The network has a built-in decentralized exchange that allows users to trade any type of currency, asset, or token. The Stellar Decentralized Exchange (SDEX) is powered by the Stellar Distributed Ledger and doesn’t require a central authority to match orders. This makes it possible to trade directly with other Stellar users without having to go through a third party exchange.
Scalable Cross-Border Payments
Let’s say you’re a manufacturer in Texas and need to order parts from China. You’ll have to pay to convert dollars to RMB as well as pay transfer fees and your partners in Asia will also have to pay fees on their end and of course, wait several days for the wire transfer to go through.
The network eliminates this by streamlining the process and virtually eliminating all fees.
Stellar is designed to be scalable so that it can handle a large number of transactions quickly and efficiently. The Stellar network can process thousands of transactions per second and has low transaction fees (usually less than a penny).
Solid Partnerships
Since its launch, Stellar has been used by organizations all over the world to facilitate cross-border payments. Some of their notable partners include IBM, Deloitte, and KlickEx. They have also been working with the UN World Food Programme to provide financial assistance to refugees in need-especially in Ukraine.
Final thoughts
For those seeking a fast, efficient, and affordable way to send money anywhere in the world, Stellar is worth considering. With its built-in decentralized exchange and support for multiple currencies, Stellar is a versatile payment platform with a lot of potential. At the time of this article the current price of the Stellar token is $0.1398.
If you believe that the future of moving money from person to person, either across town or around the world, is trending towards decentralization then Stellar could be worth taking a look at. As always with any investment, do your own research and never risk more money than you can afford to lose.
Have you ever used Stellar? What do you think of the project? Let us know in the comments below!