Stellar has experienced a surprising surge, becoming a prominent player in the current Ripple-driven crypto market frenzy.
Starting from July 18, XLM’s price has skyrocketed, leading to a remarkable 68.8% increase over the past week and a 22.1% increase in the last 24 hours. Let’s understand why Stellar can be a good alternative to XRP.
XLM, The Replacement of XRP?
This surge has propelled Stellar to dominate the top 100 cryptocurrencies list, highlighting its strong performance in the market.
The positive rally is driven by the increasing adoption of the Stellar payment protocol, particularly in Africa and LATAM, where the USDC stablecoin on the Stellar network is gaining popularity as a payment method.
.@Bitso, a Latin American crypto company, has integrated @StellarOrg‘s Anchor Network to allow companies around the world to make payments to Argentina, Colombia and Mexico using USDC.@andresengler reports https://t.co/LkP81WQTb3
— CoinDesk (@CoinDesk) July 19, 2023
The US dollar is the #1 option for international settlements, the Euro within Europe, Bitcoin for cryptocurrency settlements, Ethereum for anything in the decentralized application sphere, and so on. In a nutshell, a lot of financial systems, each with pros and cons.
Stellar Represents an Open-Source Network That Enables Them to Work Together
More specifically, Stellar makes it possible to create a digital representation of anything one can consider money, from fiat currencies to cryptocurrencies.
Let’s assume someone was born and raised in a poor country called Country A, but now works in the United States. However, he still has family back home and helps them out by sending money. So, if country A citizens are allowed to have US dollar bank accounts, great.
But in many cases, they aren’t and Stellar makes it possible for another entity, let’s say Company A, to step in and create dollar tokens. Thus, because sending a wire transfer from the US to Country A is not possible, Person A can transfer value to his family quickly and at low costs through Company A’s tokens. Tokens Person A’s family can keep, spend, exchange for Country A’s currency, etc.
In essence, think of Stellar as a system that tracks ownership. Just like Bitcoin has Proof-of-Work consensus, Stellar is powered by the SCP or Stellar Consensus Protocol, a less resource-intensive and faster alternative, with operations broadcast every 5 seconds.
350 million people in Africa don’t have access to bank accounts, and only 20% of families have formal bank accounts.@fonbnk1 provides a real-world solution to this problem by turning 8 billion active prepaid SIM cards globally into virtual debit cards with Stellar. (1/3)
— Stellar (@StellarOrg) July 18, 2023
More About Stellar
Stellar also has a native token, the lumen or XLM, with:
1) Each account is required to always hold a few units.
2) XLM is being used to cover transaction costs.
3) The speculation dimension is also present.
There are approximately 50 billion units in existence, with:
1) Roughly half of them are in circulation.
2) The remaining units are being retained by the Stellar Development Foundation for various purposes indicated by its mandate, from development to raising awareness.
3) No additional units are being created.
We’re excited to share @honeycoinapp users can now cash out of their USDC balance at supported @MoneyGram locations in Kenya, Uganda, Tanzania, Nigeria, Ghana, and the UK 🥳️
Another real-world use case for @Circle’s USDC on Stellar.https://t.co/0JKNhdJMx3
— Stellar (@StellarOrg) July 17, 2023
Conclusion
Considering that worldwide banks will adopt XRP to perform 24/7 international transfers more effectively. Stellar is a good alternative to do the same. However, there is a big difference:
Ripple has an unlimited supply, making it much easier to issue as banks need. Just as they do now with the USD. However, Stellar has a maximum supply of 50 billion coins.
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