Stellar: an open payments network for cross-border money and tokens
The Stellar Consensus Protocol, anchors and the lumen (XLM)
Stellar is an open-source blockchain network for moving currencies and assets quickly and cheaply. Its native coin, the lumen (XLM), pays fees and covers each account’s minimum balance.
1. Who built it and why
Stellar was started in 2014 by Ripple co-founder Jed McCaleb, who had earlier created the Mt. Gox bitcoin exchange, and Joyce Kim. The US non-profit Stellar Development Foundation (SDF) supports protocol development and the ecosystem. Its stated aim was to let people without bank accounts, or facing costly remittances, move money digitally.
At launch 100 billion lumens were created, with 1% added each year until a 2019 community vote ended inflation. That November SDF burned about 55 billion of its lumens, cutting supply to roughly 50 billion. On the Crypto Nation map, XLM is the city-hall tower of Stellar City, as that chain’s native coin.
2. Consensus and anchors
Instead of mining, Stellar uses the Stellar Consensus Protocol (SCP), designed by Stanford professor David Mazières. Each validator picks other validators it trusts, and agreement spreads as these lists overlap, a model called federated Byzantine agreement. Ledgers close about every five seconds, and the base fee is just 0.00001 XLM (100 stroops).
Institutions called anchors connect real money to the chain. An anchor takes deposits or cash, issues an equal-value token on Stellar, and pays out cash when the token comes back. A built-in decentralized exchange enables ‘path payments’ that automatically convert one currency into another through intermediate assets.
3. Where it is used
Circle has issued USDC on Stellar since 2021, and in 2022 MoneyGram began letting customers swap it for local cash. Franklin Templeton has used Stellar since 2021 to record shares of a US government money market fund. In late 2022 the UN Refugee Agency (UNHCR) used a Stellar-based tool to send digital aid to people displaced in Ukraine.
In February 2024 the Soroban smart-contract platform reached mainnet, enabling more complex apps such as lending and tokenization. Its contracts are mostly written in Rust, and later upgrades have refined performance and tooling. Stellar is therefore classed both as a payments network and as a platform for tokenized real-world assets (RWA).
4. Things to know
SDF still holds a large amount of lumens, so its distribution plans can affect supply and the ecosystem’s direction. Validators are concentrated among relatively few organizations, a frequent point in decentralization debates. In May 2019 the network halted for about an hour because of validator problems.
An anchor’s token is only as sound as that institution’s reserves and reliability, so it matters who issued it. In cross-border payments Stellar competes with chains such as the XRP Ledger and with traditional services. Remittance and stablecoin rules that differ by country also shape how widely it can be used.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.