Ukraine, DeFi and this is the next leg for the Stellar and XLM “scale goal”.

Ripple’s XRP and Stellar’s XLM are both among the top 40 cryptocurrencies in the market and are also seen as competitors. These two altcoins are often referred to together as they are related to technologist Jed McCaleb, who founded Ripple, then left and co-founded the Stellar Development Foundation (SDF).

Analysts, journalists and traders admit to loving the business competition and the dramatic behind-the-scenes stories, particularly the SEC-Ripple Labs lawsuit. However, while XRP is in the spotlight, supporters should not ignore XLM. Especially since it also has ambitious plans to transform cross-border payments.

Stellar will help Ukraine develop CBDC?

Ripple seems to be at the forefront in this space CBDC, announced digital currency partnerships with Bhutan and Palau. Meanwhile, Stellar is often associated with the Ukrainian cryptocurrency hryvnia. However, there is one point to note. Carolyn Yi, a spokeswoman for the Stellar Development Foundation explains:

“It is important to note that the e-hryvnia pilot is not a CBDC. It will be a privately issued cryptocurrency based on blockchain technology created in accordance with the current Cryptocurrency Law of Ukraine.

Issuance of a national digital currency occurs only under the direction of the National Bank of Ukraine.

So when will Stellar help develop a true CBDC? After all, the company has published an official report on this, so it should definitely be on the agenda. Yi confirmed that “talks are ongoing,” but couldn’t divulge more at this time.

He revealed that TASCOMBANK is building and testing “privately regulated electronic hryvnia on Stellar, regulated.” The implementation then takes place on Bitt’s Digital Currency Management System (DCMS).

“This test provides TASCOMBANK with a set of controls that they can configure for their wealth management needs while maintaining the interoperability and flexibility of the Stellar open blockchain.”

Another potential use case for the electronic hryvnia is the programmable payroll for employees of the Ukrainian mobile apps company Diia.

Can DeFi be expected on Stellar?

The SDF is also concentrating on the expansion of DeFi.

In particular, Automated Market Makers (AMMs), which form the basis of DEX operations, play an important role. Stellar has a native protocol for AMM and, as of January 10, 2022, has a total lock value (TVL) of over $40 million. Around the same time, 30% of swaps were also settled through AMM.

With the increasing need for scalability, Stellar also works with Starlight, a Layer 2 payment channel protocol, for high transaction rates per second, or ideally over 1 million payments per second, according to Yi. The SDF operator also encourages developers to try the Starlight prototype and share their feedback.

“Next, we want to interact with the ecosystem to see if this technology will bring benefits to users in the future.”

Obey the authorities

Regarding the huge regulatory interest in cryptocurrencies, Yi noted that it was “interesting” but acknowledged that there are many misconceptions that need to be addressed. SDF CEO has speech at the US House of Representatives Financial Services Committee hearing on digital assets.

Additionally, the SDF was also consulted by the Presidential Working Group on Financial Markets for their stablecoin report.

The SDF also listed the markets it expects to focus on, such as Mexico, Brazil, Kenya, Ukraine, the United States and Canada. Scalability and engagement remain top priorities. Yi closed:

“Ultimately, Stellar aims to scale while maintaining fast and secure transaction processing times.”

It can be argued that Stellar is poised to make a name for itself in the crypto scene by 2022. However, a Stellar representative announced in January 2022 that they had joined MoneyGram to help convert crypto into cash at approximately 300,000 international locations.

Stellar’s XLM is trading near $0.21 at press time. The price is currently still far from the all-time high of $0.94, although there has been some bullish trading activity lately. This altcoin also has a typical holding period of 31 days coin base.

XLM/USDT | Source: Trade View

While many would like to see XRP and XLM in one-on-one competition to dominate the cross-border remittance market, their development paths have long gone in two different directions.

It’s clear that Stellar is currently on a journey of its own.

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