The blockchain sector has matured: it’s no longer just about speculation in crypto assets, but about delivering real financial infrastructures that directly impact businesses, governments, and everyday people.
Within this movement, the Stellar Blockchain stands out with a clear purpose: to simplify global payments, reduce costs, and include those who have long been left out of the financial system.
In this article, we’ll explore Stellar and what makes it different.
What Is Stellar?
Stellar is a public, open-source blockchain created to enable fast, affordable, and inclusive global payments.
Its key strength is providing an infrastructure where financial institutions, businesses, and individuals can efficiently transfer fiat currencies, stablecoins, and other tokenized assets.
Mission of the Stellar Foundation
The mission is straightforward: “Make money more accessible, useful, and inclusive for everyone.”
This translates into:
- Supporting fast and low-cost international remittances.
- Allowing institutions to tokenize assets such as currencies, bonds, and commodities.
- Connecting people, banks, fintechs, and businesses on a single network.
Real Network Growth (2025 Data)
According to the Stellar Development Foundation’s Q1 2025 report:
- The total number of accounts on the network reached 11.28 million, an increase of more than 3 million in just one quarter.
- 10.29 million accounts were active during the month, a 28% jump compared to the previous quarter.
- The network processed 94.6 million on-chain transactions, growing 12% month over month.
- The native DEX recorded 1.1 million trades, up 10%.
- With the launch of the Soroban smart contracts platform, 12.9 million transactions have already been executed, signaling growing DeFi adoption on the network.
Who Created Stellar?
The network was founded in 2014 by:
- Jed McCaleb (co-founder of Ripple and the Mt. Gox exchange).
- Joyce Kim, lawyer and entrepreneur.
Today, Stellar is overseen by the Stellar Development Foundation (SDF), a nonprofit organization based in San Francisco that supports the growth of the ecosystem.
Why Was Stellar Created?
The initial goal was to address Ripple’s limitations, mainly its centralization, and to provide a more open network.
Stellar was born with a focus on financial inclusion, enabling people in regions without access to banking services to send and receive money digitally within seconds and at almost zero cost.
How Does the Stellar Blockchain Work?
The Stellar Blockchain was designed to be fast, efficient, and accessible, connecting fiat currencies, stablecoins, and digital assets on a single network. Here’s how it works:
1. Tokenization of Digital Assets
On Stellar, financial institutions, businesses, and fintechs can issue digital assets in a simple and regulated way. It’s possible to tokenize:
- Fiat currencies such as USD, EUR, and AUD.
- Commodities, including gold.
- Corporate credits and financial securities.
This model allows real-world assets to be used within the blockchain, with transparency and global liquidity.
2. Automatic Conversion with XLM
XLM (Lumen), Stellar’s native token, acts as a bridge currency between assets that don’t have a direct liquidity pair.
Example: USD → XLM → EUR.
This automatic conversion ensures that transactions are fast, inexpensive, and liquid, even in less connected markets.
3. Stellar Consensus Protocol (SCP)
The network’s security and speed rely on the Stellar Consensus Protocol (SCP), based on the Federated Byzantine Agreement (FBA) model.
- Each node chooses whom it trusts—similar to a trusted contact list within the network (quorum slices).
- Transactions are confirmed in 2–5 seconds.
- It consumes minimal energy, with no mining, making Stellar one of the most sustainable networks in the market.
4. Minimal Fees and Base Reserve
- Transactions on Stellar cost only 0.00001 XLM (100 stroops), a negligible amount in dollars.
- Every account must maintain a minimum balance of 1 XLM (base reserve), which helps prevent spam and keeps the network stable.
- Businesses can also sponsor user accounts through sponsoring accounts.
5. Integrated Native DEX
Unlike many blockchains, Stellar has a built-in decentralized exchange (DEX).
- Users can place buy and sell orders directly on the network.
- The system automatically matches offers with speed and transparency.
This makes Stellar ideal for direct swaps of stablecoins and tokenized assets.
6. Micropayments and Financial Inclusion
With near-instant confirmations and negligible costs, Stellar enables:
- Digital micropayments, such as subscriptions and online tips.
- Affordable international remittances, without abusive bank fees.
- Financial inclusion, especially in regions with limited access to traditional banking services.
Stellar Tokens and Products: Everything You Need to Know
XLM (Lumen)
XLM (Lumen) is the token that powers the Stellar Blockchain. It is used to:
- Pay extremely low network fees.
- Maintain the minimum balance (base reserve of 1 XLM per account), preventing spam and ensuring network stability.
- Act as a bridge currency in transactions between assets without direct liquidity.
With billions of operations already processed, XLM ensures that the network remains fast, affordable, and efficient on a global scale.
Stellar Blockchain: Open Infrastructure for Asset Issuance
Stellar operates as a public blockchain for issuing and transferring digital assets.
Companies, fintechs, and banks can tokenize:
- Fiat currencies (USD, EUR, AUD).
- Commodities like gold.
- Financial securities (e.g., funds and bonds).
Notable cases include Franklin Templeton, which tokenized funds on the network, and several solutions in emerging markets.
Stablecoins on Stellar: USDC, EURC, and More
One of Stellar’s key differentiators is its native support for regulated stablecoins, such as:
- USDC (Circle) – Launched on Stellar in February 2021, it has become one of the network’s main stablecoins. In 2024/2025, USDC growth on Stellar was largely driven by international remittances via MoneyGram, reaching over $4.2 billion in transaction volume.
- EURC (digital euro) – A regulated issuance for cross-border payments in Europe.
- GYEN (Japanese yen) and ZUSD (U.S. dollar), both issued by GMO Trust.
- AUDD (Australian dollar digital).
These stablecoins make global payments faster (3–5 seconds), cheaper (fractions of a cent), and compliant with regulatory requirements such as KYC, freeze, and clawback features.
Anchors: Bridges Between Real and Digital Money
Anchors are trusted institutions (banks, fintechs, payment processors) that serve as on- and off-ramps between fiat currencies and Stellar tokens.
They issue backed stablecoins and allow users to make deposits and withdrawals securely.
PayPal USD (PYUSD) on Stellar
A major upcoming milestone is the launch of PayPal USD (PYUSD) on Stellar.
Announced in June 2025, the rollout is pending regulatory approval in New York and is expected to take Stellar to a new level of digital payments and PayFi (Payments + DeFi).
Smart Contracts and DeFi on Stellar
Stellar was originally built with a focus on global payments and asset tokenization, but it is now expanding into the DeFi ecosystem.
- The SCP (Stellar Consensus Protocol) secures and validates transactions but does not execute smart contracts.
- To address this, Stellar launched Soroban, its smart contracts layer, which began adoption between 2024 and 2025.
- Soroban enables the creation of decentralized applications (dApps), lending platforms, DEXs, and new forms of tokenization, connecting Stellar’s ecosystem to DeFi solutions.
- Integration with anchors further strengthens the bridge between traditional finance and DeFi.
Stellar Consensus Protocol (SCP)
The Stellar Consensus Protocol (SCP) is the engine of the network:
- Based on the Federated Byzantine Agreement (FBA) model.
- Confirms transactions in 2–5 seconds.
- Consumes minimal energy, with no mining.
Although highly efficient, research indicates that part of the network still relies on nodes operated by the Stellar Development Foundation (SDF), raising discussions about the degree of centralization.
Use Cases
- International remittances: Send money across countries in seconds with minimal fees.
- Stablecoins: Circle issued USDC natively on Stellar, used by Visa, MoneyGram, and fintechs for settlements.
- Humanitarian aid: Distribution of assistance to refugees and populations in crisis (e.g., Ukraine, through NGOs supported by the SDF).
- Micropayments: Small-value payments, such as digital subscriptions and online services.
- Global enterprises: IBM used Stellar in its World Wire project to connect banks and payment systems.
- Financial inclusion: Fintechs in Africa and Asia leverage Stellar to provide digital banking access.
Strengths and Challenges of the Stellar Blockchain
Strengths
- Fast transactions (2–5 seconds): Stellar Blockchain confirms operations within seconds, making it ideal for international remittances and micropayments.
- Extremely low costs: Each transaction costs only 0.00001 XLM, enabling global-scale digital payments without excessive fees.
- Energy efficiency without mining: The Stellar Consensus Protocol (SCP) doesn’t require mining, making the network sustainable and low-energy compared to blockchains like Bitcoin.
- Open to institutions and individuals: The network is public and open-source, allowing banks, fintechs, companies, and individuals to issue and transfer digital assets.
- Real-world use cases with global companies: Stellar has been adopted in projects with IBM (World Wire), MoneyGram, Visa, and NGOs that use stablecoins on the network for payments and humanitarian aid.
Challenges
- Risk of centralization: Research shows the network still relies on nodes validated by the Stellar Development Foundation (SDF), raising concerns about decentralization.
- Competition in the payments sector: Stellar faces rivals such as Ripple, Solana, and Ethereum, which also provide solutions for global payments and asset tokenization.
- Mass adoption hurdle: Despite strategic partnerships, Stellar still needs to expand everyday usage and reach end-users on a larger scale.
Stellar vs. Ripple, Solana, and Ethereum
- Ripple (XRP Ledger): Also focused on international payments, but with a stronger emphasis on institutional banking partnerships. Stellar, on the other hand, aims to balance corporate adoption with individual user inclusion.
- Solana: Offers high speed and an active ecosystem of NFTs and DeFi but struggles with stability issues and variable costs. Stellar remains more stable and predictable, especially for remittances and stablecoins.
- Ethereum: The leader in smart contracts and DeFi, but with higher fees. Stellar sets itself apart as an optimized solution for low-cost payments and regulated tokenization.
This comparison highlights Stellar’s unique positioning: it doesn’t directly compete in the same space as Ethereum or Solana but instead establishes itself as a dedicated infrastructure for global payments and financial inclusion.
Why Is Stellar Important?
The Stellar Blockchain is not just another network in the crypto market. Its mission of financial inclusion, combined with fast transactions, ultra-low costs, and energy efficiency, makes it one of the most relevant infrastructures for global payments and real-world asset tokenization.
Experience Stellar on Klever Wallet
The Klever Wallet now offers integration with the Stellar Blockchain, allowing you to store, send, and receive XLM and Stellar-issued stablecoins such as USDC and EURC with security and simplicity.
Download Klever Wallet today and discover how to take part in a global ecosystem that is transforming the future of digital payments.
FAQ About Stellar Blockchain
What is Stellar (XLM)?
Stellar is an open-source blockchain protocol launched in 2014 by Jed McCaleb and Joyce Kim. Its goal is to simplify money transfers globally, enabling people and institutions to send and receive assets in seconds at very low costs.
Who created Stellar and when?
Stellar was founded in 2014, with early backing from Stripe. Jed McCaleb (also co-founder of Ripple) and Joyce Kim were its creators.
How does Stellar reach consensus?
Stellar uses the Stellar Consensus Protocol (SCP), based on the Federated Byzantine Agreement (FBA). Instead of mining, transactions are validated by nodes in quorum slices, confirming blocks in 2–5 seconds.
Is Stellar proof-of-work or proof-of-stake?
Neither. Stellar avoids mining altogether, making it energy-efficient and environmentally friendly.
What is the Stellar Development Foundation (SDF)?
The SDF is a nonprofit that supports the Stellar ecosystem through:
- Grants & funding programs
- Community events (e.g., Stellar Community Fund)
- Partnerships with banks, fintechs, and governments
But it does not control the network, reverse transactions, or access user keys.
What is the memo in Stellar transactions?
The memo is an optional field for normal wallets but is often mandatory on exchanges to identify your deposit. If you forget it, you’ll need to contact the exchange with transaction details.
What is the minimum balance requirement?
- 1 XLM to activate a wallet
- +0.5 XLM per trustline (each additional asset)
Example: Adding 3 assets = 2.5 XLM required.
Is Stellar secure?
Yes—SCP is efficient and secure. But researchers note that over-reliance on a few validating nodes can reduce resilience. The network is strengthening by encouraging more independent validators.
Does Stellar have a decentralized exchange (DEX)?
Yes. Stellar has a built-in DEX, where users can:
- Place offers to swap assets
- Use automatic path payments (e.g., EUR → AUD → XLM → USD)
Who are Stellar’s partners?
Key partnerships include:
- IBM for cross-border payments
- MoneyGram for global remittances
Collaborations with banks, Deloitte, and fintech firms
