Stellar Payment Network: Changing the Global Payment Industry? 

Stellar Payment Network: Changing the Global Payment Industry? 


The stellar payment network is an open-source, interoperable payment system that allows users to receive and send forms of money. The stellar system is designed to make the world’s financial systems work together on a single network. Stellar is a decentralized system that runs on open networks with millions of transactions processed every day.

Stellar Payment Network

Also Read: The Bitcoin Lightning Network

You can also see the stellar payment network as a decentralized payment protocol that permits cross-border transactions. You can create a redeemable, tradable representation of any asset on the stellar blockchain. These tradable representations are called tokens, and they are more useful when tied to currencies.

What is Stellar Payment Network?

The Stellar network was launched in 2015, and since then has processed at least 450 million operations. Different companies and businesses have adopted Stellar to move money across new markets. The Stellar system seeks to enhance the existing financial system rather than undermine or replace it.

Unlike the Bitcoin network designed for trading only bitcoins, the Stellar network allows the trading of any kind of asset transparently and efficiently. Stellar’s native token, called the Lumen, is required in small amounts to initialize accounts and make transactions. Lumen powers the Stellar network and all of its operations in the same way ETH powers the Ethereum network.

All transactions that take place on the Stellar network gets added to a shared, distributed, public ledger. The database is accessible to anyone, anywhere worldwide. To reach consensus on transactions efficiently, Stellar employs its unique consensus method.

The Stellar consensus method allows users to perform fast and cheap transactions. Everyone on the Stellar payment network can reach an agreement about a transaction’s validity within a few seconds. Every node (or a participant) that adds Stellar transactions to the global ledger will choose its own personal mini-network. The mini-network comprises of other trusted participants that it agrees with. Provided these mini-networks (known as quorum slices) overlap, the overall Stellar payment network can reach consensus in a slit second.

Also related: What is Ethereum 2.0?

Things You can do on the Stellar Payment Network.

  1. You can issue your own assets.

As a user on the Stellar network, you can create a redeemable and tradable representation of any asset. This kind of representation is known as a token, and the tokens are most useful when tied to currencies. Stellar provides a generalized toolkit for you to do the same thing Tether did for the Dollar using their USDT. With the Stellar network, you can digitize value, issue, and redeem claims on it.

Any user can see, hold, and trade Stellar tokens; however, they are highly configurable. Meanwhile, if you have any specific compliance needs, you can:

  • Require that the people who are holding your token pass your KYC program.
  • Control access to your tokens by using multi-signature accounts.
  • Create time-locked escrows any account or asset on the network.

Tokenization is a fundamental part of the Stellar payment network. One of the most powerful features of the Stellar network is the ability to issue and redeem assets.

  1. Peer-to-peer Trading of tokens

You can exchange every token on Stellar with any other token on the network. The Stellar protocol connects the buyers and sellers on the network. No intermediary or go-between arranges transactions since a decentralized exchange is built into the Stellar ledger system. Aside from tracking balances as Bitcoin and Ethereum do, Stellar also tracks and settles trades between balances in a decentralized manner.

  1. You can transform currency as you send it. 

Just like every payment system, the Stellar network allows you to send or receive any currency from another. You can send dollar tokens, Stellar lumens, or whichever currency you want. The peculiar thing about this network is that it allows you to send one currency, and the recipient receives another.

For example, a British company can pay an invoice in Nigeria by sending pound tokens, while the vendor receives Naira tokens. One fascinating thing about this transaction is that neither side incurs exchange risks or delays.

Some Real-World Applications of Stellar Payment Network

Vumi, the open-source messaging platform of the Praekelt Foundation, uses cell phone talk time as currency using the Stellar protocol. In April 2015, Stellar entered into a partnership with Oradian, a cloud-based banking software company. The partnership was to integrate Stellar into Oradian’s banking platform to add microfinance institutions (MFIs) in Nigeria.

Read: Proof-of-work vs proof-of-stake: the best for scaling blockchains

In 2016, Deloitte partnered with Stellar to build a cross-border payment application known as the Deloitte Digital Bank. Stellar also partnered with IBM AND KlickEx to facilitate cross-border transactions in the South Pacific region.


The Stellar payment network is useful and valuable since it can host thousands of exchanges between currencies and tokens per second. It makes the exchange of cryptocurrencies and fiat fast and cheap for users. With the high cost of cross-border transactions, the Stellar network sure has something great to offer in the global finance industry.




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