Stellar- Increasing Interoperability Between Diverse Financial Systems and Currencies

Problem identification: Talking about the money market, transfer of money from one country to another involves an expensive wire transfer at a brick-and-mortar location. The existing systems such as wire transfers or banks rely on legacy software which has slow verification procedures and high built-in-costs. Adding to it, in poor countries, basic financial services are missing and loans are provided at exorbitant rates. To transfer money, they have to find a way to physically transport it.

Stellar - Addressing the problem: A non-profit, Stellar has created its own low-cost open-source protocol. The cryptocurrency-based payments system was launched  in 2014 by Jed McCaleb. It allows users to send and receive money between any pair of currencies. The idea is to allow easy and cheap transfers between any pair of currencies, whether fiat (such as the dollar), digital (such as bitcoin) or notional (such as cell phone talk time) that any financial provider can plug into. The startup company will use a bitcoin-like virtual currency called “Stellar” to provide the conversion path between all the currencies.  Stellar is used as an intermediary currency for transactions that use the system. The platform will also allow users to make standard payments without needing to ingrate stellars. The transaction can be peer-to-peer or use a middleman known as a “gateway.”

In February, 2015, it announced a partnership with banking software company Oradian to use Stellar’s platform in its core banking software for micro-finance institutions (MFI), with an eye toward using digital-currency based payments networks to improve the ability of financers to work with each other. The idea behind micro-financing is to extend banking services on a very small level to people in emerging markets to the people who do not have access to banking services.

Interoperability: Stellar has created an entirely new codebase designed with safety, minimalism, scalability, interoperability, and multiple implementations in mind. The core consensus server is as simple and economical as possible. Live data is stored in standard databases and served to clients from external web servers reading those databases. Transactions are now collections of simple operations that can be composed in a variety of ways supporting multisig and other innovative arrangements thereby achieving the interoperability aspect.

Founding member: Jed McCaleb is a co-founder of Stellar Development Foundation. In 2000, he created eDonkey, one of the largest file-sharing networks of its time. He later created Mt. Gox, the first bitcoin exchange, which was subsequently sold and re-coded by its current owners, followed by Ripple.

Stellar's Funding Information:

Investors: Stripe

Funding Type:  Seed

Fund raised: $3 million

Date: August, 2014

Here is an amazing infographic highlighting the organization:

Products/ Services: The company’s portfolio includes the following:

Stellar client

Stellar Client: Stellar Client is an AngularJS application that allows users to interact with the Stellar network from their browser. The client allows users to register for an account, generate a wallet containing cryptographic keys and submit transactions to the Stellar network.

Stellar wallet

Stellar wallet: Stores encrypted data. The wallet server can't decrypt the data.

Stellar viewer

Stellar Viewer: This is a simple tool that shows the balance, trust lines and offers of any specified user on the Stellar network. It is an AngularJS application that uses WebSockets to communicate with a Stellar daemon.


Stellard: The network consists of peers running stellards. It validates the ledger and introduces transactions onto the network.

Stellar lib

Stellar-lib: stellar-lib connects to the Stellar network via the WebSocket protocol. It runs in Node.js or in the browser.



Kate is a staff writer at, , She likes to write about mobile payments and mobile commerce.

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