What is XLM / Stellar?

Posted on November 19, 2022  •  2 minutes  • 317 words

XLM, also known as Stellar, is a decentralized payment platform that uses blockchain technology. It was created by the Stellar Development Foundation, with the goal of enabling faster, cheaper, and more reliable global financial transactions.

One of the main use cases for XLM is as a bridge currency for international money transfers. When a financial institution wants to send money from one country to another, it typically has to go through a series of intermediaries, such as banks and money transfer services. This can be slow, expensive, and complex.

XLM solves this problem by allowing institutions to send money directly to each other, without the need for intermediaries. This can make international money transfers much faster and cheaper, and also allows for more efficient use of capital.

Another use case for XLM is as a liquidity solution for payment providers. When a payment provider wants to process a transaction, it typically has to hold funds in multiple currencies in order to be able to fulfill the transaction. This can be expensive and inefficient, as the provider has to hold onto funds that may not be used for a long time.

XLM solves this problem by allowing payment providers to use XLM as a liquidity tool. They can hold a balance of XLM and use it to instantly convert between different currencies, without having to hold onto funds in each individual currency. This can save the provider money and make their operations more efficient.

Additionally, XLM can be used to issue, trade, and manage assets on the Stellar network. This allows for the creation of custom digital assets, such as tokens representing a specific currency or asset, which can be easily transferred and traded on the network.

Overall, XLM has a number of compelling use cases in the financial industry, and its ability to facilitate fast, cheap, and reliable global transactions makes it an exciting technology to watch.