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Redefining International Banking with Stellar(XLM)

October 2, 2018


Typically, the headlines that we analyze come directly from outlets like Coindesk and Cointelegraph, which consistently stand as the Crypto space’s news leaders. This time, it is going to be a bit different, for a very specific, arguably important reason.


Sometimes, by putting the pieces together, we can conclude that sometimes, the real breaking news exists between the lines.


Making these general statements, however, means nothing without a little more context. In this case, what we are talking about is the ongoing saga of Stellar and the question of exactly how their intended, primary use case will play out on the open market.


Central to this saga is Stellar’s partnership with IBM, which has been going on almost since the inception of the network. Now, with the launch of their new decentralized exchange as well as the growing popularity of their network, overall, it is easy to wonder what developments will come next for Crypto’s most popular no fee network.


While we are on the subject one writer on Medium poses the question: are Stellar and IBM working together to redefine how international banking is done? Inside of this writer’s piece, he goes through a brief history of the U.S. dollar’s relationship with the rest of the world, which includes the creation of the SWIFT network.


In short, since SWIFT has become the standard for doing any sort of international transfer involving U.S. dollars, it can be argued that the U.S. effectively uses it as a weapon against countries, with which it has political arguments.


Because of this, the same writer mentions countries who have basically been expelled from the SWIFT network, and how this could motivate them to accept another viable option of doing international bank transfers, if one comes into being.


With this argument, one can then extrapolate that this is where Stellar comes in. At its simplest level, Stellar was built to be essentially, a free version of Western Union or SWIFT. In other words, Stellar answers the question: what would it look like if we did not have to ever pay fees on our International bank transfers?


Now, at this point, you might find yourself saying: okay, that sounds promising, but what partnerships does Stellar actually have with banks? First and foremost, it is not easy to find an answer to this question. Stellar’s website contains little information on its direct work with banks, though it does have a long list of other partners. Furthermore, it is logical to conclude that the possibility of Stellar even having any active banking partners is still up in the air.


In July, an executive for IBM stated that two large, international banks are actively using Stellar, but apparently refused to name them. Because of this and the overall, accepted idea that a product has little value until it has proven use cases, the most we can say at this time is that Stellar has a noble vision, as well as a good long list of promising partnerships.


Whether or not they achieve this noble vision, depends on these banks choosing to accept their network over existing, legacy titans like SWIFT. If, in the end, SWIFT is overthrown, we just might see a Cryptocurrency that attains more real world value than Bitcoin ever will.



By: BGN Editorial Staff

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