Authentication & Security

Stripe Brings the Stellar as a Rival to Virtual Currencies

In recent times, we have witnessed the advent of virtual currencies like Bitcoin. But such virtual currencies increase the user's dependency on the specific currency network and challenges may arise in retrieving the correct monetary value especially in multi-currency scenarios. It would be ideal if there is a singular form of currency which can represent synchronization of multiple currencies. With this vision in mind, Stripe is focusing to resolve such issues by bringing something new to the payment space.

Stripe is known for helping online merchants and websites process payments, but it is also focusing more on decentralized payment networks and cryptocurrencies. The company recently invested in Stellar, an open-source project that launched recently.

Stellar is a decentralized payment network incorporating a currency-exchange network, and it supports traditional currencies besides acting itself as a cryptocurrency. The Stellar network can be used to send and receive payments in a pair of currencies. For example, the sender can send money in euros and the receiver can receive the amount in a different currency, such as the dollar. The network uses a system of gateways that act as network participants and accept money deposits in exchange for credit on the network.

Currency balances are represented as credits from the gateway. For example, a user could deposit $100 in an appropriate gateway via ACH, and the gateway would issue a credit to the user’s Stellar account. The credit issuance will succeed only if the user is already marked as a trusted gateway user for at least $100.

Stellar also provides its own native currency, which has been developed as a conversion path between different currencies. The value for Stellar will be market-oriented. Stellar aims to establish a universal network to overcome the challenges other cryptocurrencies, such as Bitcoin, have encountered when they are to be retrieved from speciality exchanges.

“All the financial structure today is fragmented and out of date,” says Stellar executive director Joyce Kim. “They can’t communicate with each other. Bitcoin hasn’t really made it mainstream. What we decided to do with Stellar is create this common language.”

As a nonprofit organization, Stellar will initially distribute the “Stellar” coins through its network. The network will initially have 100 billion stellar, and it is poised to grow at a rate of 1% annually. The stellars will be distributed among registered customers, other nonprofit organizations working on financial inclusion and other cryptocurrency holders.

“Stellar’s goal is to build a great transport layer for transmitting monetary value,” Greg Brockman, a Stripe crypto specialist, posted on his blog. “Figuring out how to efficiently move money is something we support very strongly: Stripe spends a lot of effort integrating different banking and finance protocols in various countries (17 at last count). We’ve always considered it unlikely that these systems would be just as fragmented in twenty years. Bitcoin has already changed the world by drawing attention to the value of open, distributed protocols that enable the transmission and storage of money. Stellar aims to advance this success by providing a way to transact in one’s currency of choice, whether that currency is fiat or digital.”


Ray has keen interest in the area of devices, OS and wireless technologies. He is a Mobile Technology enthusiast and believes that Mobility is going to completely change the way we do Payments and Commerce. He wishes to share this belief with the world by providing such content through LetsTalkPayments. Ray has done his engineering as well as MBA.

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