Stellar Lumens (XLM) is one of those projects that was launched in the early days of the blockchain industry. Founded by a team of blockchain enthusiasts (including Ripple XRP co-founder Jed McCaleb), Stellar solved the concerning issues surrounding cross border payments.
It developed a technology that helps the common man transfer fiat anywhere across the globe at lowest fees and speedy transfer (3-5 seconds for transaction confirmation) compared to the traditional methods i.e banks. All you need is to hold XLM tokens that will be used to pay for the transaction fees on the network, which goes as low as 0.00001 XLM per transaction.
In this post, I will talk about Stellar Lumens partnerships. Stellar made news after announcing strategic partnerships with various platforms, which skyrocketed the price of XLM token for a brief moment. Let us take cues from them to predict the future direction of the project. Let’s roll –
1. Stellar Partnership with MoneyGram:
MoneyGram is one of the largest fiat transfer services in the world. It ditched Ripple (due to lawsuit) and partnered with Stellar Development Foundation to facilitate cross border transactions using blockchain-based network.
Stellar Development Foundation (SDF) is a non-profit organization that supports the development of Stellar Lumens. It is also responsible for Stellar marketing, partnerships and maintenance of its network. The members of the leadership team led by CEO Denelle Dixon can be seen below –
The partnership will allow MoneyGram to embed blockchain technology in its already established network. It will also help MoneyGram enable cash funding and payments in multiple fiat currencies using USD stablecoin (USDC).
USDC is a stablecoin, managed and monitored by the CENTRE consortium between Coinbase and Circle. This partnership will bridge crypto assets and fiat currency and make the conversion process smoother compared to the traditional method where users have to depend on the banks to help with the conversion process.
This partnership will eliminate the need for a bank account
2. Ukrainian Partnership:
The Ukrainian government has picked Stellar Development Fund to digitize their currency “hryvnia” as CBDC ( Central Bank Digital Currency). MoU was signed between both parties i.e Ministry of Digital Transformation of Ukraine and Stellar Development Fund to help Ukraine build its first national digital currency.
Stellar will use its Stellar Consensus Protocol (SCP) to verify and facilitate digital transactions over the private version of its blockchain. The e-hryvnia complete rollout should happen in 2022.
3. Tala Stellar Partnership:
Tala is a digital finance company that makes financial services affordable for everyone. It operates in Kenya, India, Mexico and the Philippines with an aim to provide access of digital services to the unbanked.
It has its own lending app that enables customers to apply for loans (micro-loans) regardless of their credit history. Stellar has made $40 million investment in Tala to help expand its range of products. Tala users can borrow, sell, save, invest & send/receive money using Stellar assets and stablecoin USDC.
This partnership will help Stellar encourage crypto adoption and expand its footprints in these countries
4. Circle Brings USDC to Stellar:
MoneyGram, Tala and similar platforms that partnered with Stellar Development Fund uses USDC stablecoin to connect fiat with cryptocurrencies. A handful of users knows that the USDC on Stellar is supported by Circle.
Circle is an online platform that enables users to send money. Stellar uses Circle’s USDC stablecoin to facilitate currency transfer and settlements in a local currency.
Stellar-USDC enables low-cost cross border payments and faster settlements
5. Flutterwave Stellar Partnership:
Flutterwave is a fintech company based in Africa that provides payment infrastructure to make and accept payments from customers from anywhere in the world, online (Website & Mobile) or in-person (Point of Sale).
Stellar Development Fund helps Flutterwave use USDC stablecoin on the Stellar network to scale remittances between Africa and Europe.
How Stellar Partnerships affect XLM Price?
To put things into perspective, each platform is integrating Stellar technology to scale their network and adding USDC stablecoin to bring cryptocurrencies onboard. However, when it comes to network fees, there’s no mention of XLM as a form of payment despite the demand generated by Stellar Development Fund.
This is disheartening for XLM investors because none of these partnerships gave a slight hint of making XLM the main currency when it comes to paying for the network fees. Hence, there won’t be any significant demand waiting to pick up after the complete rollout of these projects.
It’s USDC that steals the limelight from XLM by becoming a key element in these partnerships
This completes my post on Stellar Lumens partnerships. In the next post, I will talk about the Avalanche ecosystem & Polkadot Parachain. If you’re a fan of blockchain technology then please do share this post on your social handles and educate everyone around you. Do remember to subscribe to my YouTube channel for more informative content, released every week.
Cryptocurrency is a highly volatile market. All the information shared in the post is for knowledge purpose only. By no means, it’s financial or investment advice. Readers are responsible for their own investment decisions and should only invest in cryptocurrency after proper research.
Paras is a blockchain writer & video creator at Katoch Tubes. In his free time, he loves watching space exploration documentaries & Hollywood movies.