The Power of Stellar

Stellar is an open-source network for currencies and payments. Stellar makes it possible to create, send and trade digital representations of all forms of money—dollars, pesos, bitcoin, pretty much anything. It’s designed so all the world’s financial systems can work together on a single network.

Stellar has no owner; if anything it’s owned by the public. The software runs across a decentralized, open network and handles millions of transactions each day. Like Bitcoin and Ethereum, Stellar relies on blockchain to keep the network in sync, but the end-user experience is more like cash—Stellar is much faster, cheaper, and more energy-efficient than typical blockchain-based systems.

Each year, over $500 billion of value is transferred cross-border through personal remittances. In most cases, remittances are transfers of money from foreign workers to family members in their home country, sent on a monthly basis. The typical transaction is $200 to $300 and the average retail cost of these transfers runs 7-8%, usually collected in cash. Sending costs can be as high as 15% when transferring money to people in developing economies.

High fees to use traditional Money Transfer Operators (MTOs) are often paid by those who can afford it least – the 1.7 billion unbanked adults in the world. And those costs impact not only the sender and receiver – they also impact businesses wanting to provide speedy, affordable remittance services to these under-served demographics.

Because there are so many steps involved in using legacy financial systems and moving value through emerging market economies, costs have remained high. But technology is changing the landscape. Today, remittance service providers, digital money apps, growing fintech companies, and remote traditional banks can use Stellar to reduce the friction and costs associated with traditional MTOs, correspondent banks, and financial payment rails.