How Did Stellar Become The Sixth-Largest Crypto?

Stellar, which trades with its native cryptocurrency tokens called lumens (XLM), last week secured the sixth spot in the coveted list of cryptocurrencies with highest market capitalization, as per CoinMarketCap.com.

A series of positive developments in recent times have helped it gain this spot. Here’s a look at what helped Stellar surge past other popular cryptocurrencies like Litecoin, IOTA, and Tether.

The big boost for Stellar came through mid last week when a key deal was announced between Stellar and TransferTo, an international money transfer platform. Stellar is known as an established distributed ledger technology (DLT) platform that supports a cross-border transfer and payment system to connect financial institutions. Stellar’s USP lies in significantly reducing the transaction costs and time lags, owing to its capabilities of instant settlement of cross-border payments and transaction execution.

As a part of the agreement, TransferTo, which operates a cross-border mobile payments network for emerging economies, will work with Stellar to boost the international payment transfers and settlements providing customers with low-cost, real-time and secure transfers. With both the organizations having a robust network of affiliate partners, financial institutions, digital financial service providers like payment gateways, the collaboration will allow expanding the money transfer operations to more than 70 international locations around the globe. (See also, Find The Top Money Transfer Services.)

Two weeks ago, leading cryptocurrency exchange Coinbase announced that it is exploring possibilities for adding Stellar to its trading platform, in addition to other currencies like Cardano (ADA), 0x (ZRX), Basic Attention Token (BAT), and Zcash (ZEC). This is expected to boost Stellar's market activity, bringing in more participants and liquidity.

On July 17, Stellar became the first DLT platform to secure a Sharia Compliance Certification for crypto payments & asset tokenization. The Shariyah Review Bureau (SRB), an international Sharia advisory agency licensed by the Central Bank of Bahrain, reviewed the properties, features and applications of Stellar and has issued the necessary guidelines to enable use of Sharia compliant applications of the Stellar blockchain technology in Islamic financial institutions. The certificate also extends to the lumens cryptocurrency.

The certification will open new markets for expanding Stellar in global locations where financial service require adherence to Islamic financing principles. For instance, countries in the Middle East, like Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and UAE, and those in the South East Asia, like Indonesia and Malaysia, can now adopt the Stellar technology in their Sharia-compliant product and service offerings. 

However, Stellar is not the only DLT platform to gain Sharia compliance. In March, NOORCOIN secured a Sharia Certificate from the World Sharia Advisory Committee, becoming the first utility token to gain Sharia compliance. In April, Bitcoin was recognized as “generally permissible” under Sharia law according to a report released by an internal Sharia advisor to fintech startup Blossom Finance, reports CoinTelegraph.

Around mid-July, International Business Machines Corp. (IBM) announced it was backing the "Stronghold USD” stablecoin project that is built on Stellar network’s blockchain. The stablecoin is being launched by Stronghold, a cryptocurrency trading platform housed by Stellar. Called Stronghold USD, the Federal Deposit Insurance Corporation (FDIC)-insured stablecoin will be asset-backed at one-to-one US dollars per coin, and the necessary reserves will be held by a state-chartered trust company. The FDIC is a federal agency that guarantees deposit insurance for clients at commercial banks and savings institutions, covering amounts up to $250,000. (See also, Is Stablecoin the Answer to All Cryptocurrency Problems?)

The collaboration with IBM will explore uses for Stronghold USD within blockchain business networks on the IBM Blockchain Platform.

“The digitization of real-world assets using blockchain can dramatically transform many forms of financial transactions conducted around the world,” said Jesse Lund, global vice president of IBM Blockchain. “New types of fiat-backed instruments, like Stronghold’s USD token, have the potential to improve the backbone of international banking operations and payments, giving banks an easier way to integrate with public blockchain networks without significant changes to their core banking and compliance infrastructure.” (See also, IBM Launches Stablecoin Backed By FDIC-Insured Banks.)

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