Meet Stellar: How XLM Is Quietly Driving Global Payments
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Key Takeaways
Stellar is designed to make cross-border payments faster, cheaper, and more accessible.
Protocol 23 will introduce parallel transactions, scalability, and better developer tools.
Institutional partnerships and tokenization are central to Stellar’s growth strategy.
DeFi and stablecoin projects on Stellar focus on real-world use, especially in underserved regions.
Cross-border payments are often slow, expensive, and difficult for many people worldwide to access. In fact, an estimated $200 billion is lost every year in fees and inefficiencies just to move money across borders.
Businesses face hidden losses, too: out of US $3.4 trillion in cross-border transactions, companies lose 4% on average, and up to 5–8% for smaller enterprises, due to fees and inefficiencies.
In the U.S. alone, individuals and small businesses paid $17.9 billion in cross-border transaction fees in 2023, with $5.8 billion hidden in rate markups.
Stellar, powered by its native currency Lumens (XLM), is tackling this head-on by offering a fast, low-cost and inclusive financial infrastructure.
With major upgrades, institutional partnerships, and real-world asset (RWA) tokenization on the horizon, Stellar is moving into a new growth phase.
CCN contacted Stellar to understand its system in depth. This article explores the network’s role in global payments, explains how its technology works, and examines what upcoming developments mean for the future of finance.
History of Stellar Lumens (XLM) Adoption for Payments
Stellar was founded in 2014 by Jed McCaleb, co-founder of Ripple, and Joyce Kim, with early support from Stripe’s Patrick Collison. The nonprofit Stellar Development Foundation (SDF) was created to oversee the project. From the start, Stellar’s mission was clear: build a low-cost, borderless payment network to improve financial access worldwide.
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The network launched with 100 billion lumens (XLM) as its native asset. Early adopters included Mercado Bitcoin in Brazil, and by early 2015, Stellar had grown to millions of user accounts. That same year, Stellar introduced the Stellar Consensus Protocol (SCP)—a fast, energy-efficient alternative to proof-of-work systems like Bitcoin.
Partnerships and Real-World Adoption (2015–2017)
Stellar quickly pursued real-world financial use cases, especially in emerging markets:
Integrated into a South African messaging app to enable mobile savings.
Expanded across regions with partners like Coins.ph in the Philippines, ICICI Bank in India, Flutterwave in Africa, and Tempo in Europe.
A major milestone came in 2017 when Stellar partnered with IBM and KlickEx to power cross-border payments across the South Pacific. Around the same time, additional collaborations emerged in Africa and Europe, laying the foundation for Stellar’s global footprint.
Technology Growth and Ecosystem Building
In 2017, Stellar launched its commercial arm, Lightyear.io, which later merged with blockchain startup Chain to form Interstellar. This move helped expand Stellar’s enterprise reach.
The network became known for its low transaction costs, near-instant settlement, and use of XLM as a bridge currency, enabling efficient liquidity for global payments. SDF also introduced tools like the Stellar Disbursement Platform (SDP) to simplify bulk payouts and aid organizations in distributing funds at scale.
Institutional Adoption and Tokenization (2021–Present)
By the 2020s, Stellar began to attract institutional players. Franklin Templeton issued tokenized U.S. Treasuries on Stellar, creating one of the first institutional-grade blockchain investment products. Other innovations followed, including tokenized government bonds and new yield mechanisms.
Meanwhile, Stellar became a hub for stablecoins and real-world assets (RWAs), integrating with major companies like PayPal and Societe Generale-FORGE. These partnerships positioned Stellar as a network for compliant tokenization and cross-border settlement.
“Stellar is the second largest chain with respect to asset tokenization ”
CEO Denelle Dixon stated at the WEF's, Crypto at a Crossroads event
XLM’s 97% Surge Explained: Stellar’s Protocol 23 and DeFi Growth
XLM surged nearly 97% by August 16, fueled by rising decentralized finance (DeFi) TVL, smart contract activity, and excitement for the upcoming Protocol 23 upgrade in September 2025.
The Stellar spokesperson described the upgrade as a turning point. They pointed out that Protocol 23 is a significant upgrade for the Stellar network, delivering three key focus areas for 2025:
Enhanced performance to handle higher transaction volumes
Scalability improvements through parallel processing
Better tools for developers building on Stellar
“One of the most exciting features is support for parallel transactions. Rather than processing transactions one by one, the network will handle multiple transactions simultaneously.”
“This is crucial as Stellar continues to grow—the network already processes millions of transactions daily and facilitated $4 billion in RWA payments during Q2 alone. With parallel processing, the Stellar network can continue to scale seamlessly to meet increasing demand, ensuring smooth operations even as transaction volumes continue to expand.”
Stellar Expands Institutional Adoption with PayPal PYUSD, EURCV and $515M in Tokenized RWAs
Stellar’s institutional adoption is growing, with PayPal’s PYUSD and Societe Generale-FORGE’s EURCV now integrated into the network. The spokesperson emphasized that the Stellar Development Foundation (SDF) is focusing on bringing more RWAs onchain.
“The Stellar network currently has over $515 million in RWA today, representing 18% year-over-year growth.”
They pointed to PayPal’s PYUSD enables:
Fast and affordable cross-border payments.
Broader access to financial services.
Liquidity and financing opportunities through Payment Financing (PayFi).
The spokesperson pointed out, “tokenized RWAs sit at the intersection of traditional and digital finance, and our goal is to solidify and grow our position as a leading network for tokenized RWAs by focusing on assets that have real-world utility.”
Stellar Drives RWA Tokenization with ERC-3643, Franklin Templeton & Emerging Market Innovations
The Foundation has expanded into tokenization through investments in Archax and by joining the ERC-3643 Association, which promotes standards for compliant tokenized assets.
The spokesperson explained that this reflects Stellar’s vision for compliance and interoperability:
“Joining the ERC3643 Association reflects our vision that open standards, strong compliance frameworks, and interoperability are crucial to unlocking the adoption of tokenized real-world assets. It’s this core belief that guided many of Stellar’s design decisions and partnerships and made it home to groundbreaking innovations that are reshaping finance.”
They shared several examples of innovation already underway on Stellar:
Franklin Templeton’s tokenized U.S. Treasuries, pioneering institutional-grade blockchain investments.
Etherfuse’s Mexican stablebonds, tokenized debt instruments backed by local government bonds, are expanding access to emerging market opportunities.
Franklin Templeton’s upcoming intraday yield, a first-of-its-kind feature offering second-by-second yield distributions.
The spokesperson stressed how Stellar’s infrastructure makes these innovations feasible:
“Stellar’s combination of low transaction costs, lightning-fast settlement, and 24/7 processing power makes innovations like intraday yield not just possible, but practical.”
Commercial real estate is also on the roadmap. They noted that traditional barriers such as high minimums, low liquidity, and opaque ownership can be reduced through tokenization:
“Bringing commercial real estate onchain lowers those barriers and opens access to assets that were once reserved for large institutional players. These are exactly the kinds of boundary-pushing developments we’re thrilled to see building on Stellar. They demonstrate how blockchain technology can fundamentally improve financial services across multiple asset classes.”
The network’s stablecoin ecosystem has grown to $222 million in supply with $150 million in DeFi TVL. The spokesperson outlined Stellar’s strategy: support projects that connect DeFi utility directly to real users, especially where traditional finance is limited.
They highlighted Meru, a wallet using Stellar smart contracts to integrate yield protocols:
“One of our core strategies is supporting projects that bring DeFi utility directly to real users, especially where traditional finance falls short. With smart contracts on Stellar, wallets like Meru are integrating yield protocols right into their apps, letting regular people invest small amounts and start earning returns.”
According to the spokesperson, Meru already empowers:
Freelancers in Mexico to save and grow earnings.
Small and medium enterprises in Argentina to manage capital more effectively.
Everyday users can spend, save, and earn yield within one app.
They also stressed the broader impact:
“These are regular people investing whatever they can afford to build their financial future. We believe this massive, underserved population represents the true future of DeFi: practical financial tools people use every single day.”
Stellar’s future rests on a clear trajectory: scalability through Protocol 23, stronger institutional partnerships, and practical DeFi tools for underserved communities. By combining low-cost infrastructure with a growing ecosystem of tokenized assets, Stellar is steadily building a payments network designed for global finance at scale.
USDC on Stellar – Key Metrics and Trends
Circulating supply: As of mid-2025, roughly US$0.17 billion of USDC are issued on Stellar (0.25% of total USDC supply). This represents an “all-time high” on Stellar, up from about $83 million in mid-2023.
Transaction volume: Stellar USDC has processed billions of dollars in payments. Circle reported over $4.2 billion in cumulative USDC payment volume by mid-2023 (one industry report noted $7.7 billion by late-2022). This growth reflects frequent use in cross-border transfers and bulk payouts.
Accounts/trustlines: Stellar wallets holding USDC are on the order of hundredsof thousands. For example, Circle noted 500,000 Stellar accounts had USDC trustlines as of mid-2023. (By contrast, the Stellar network has millions of accounts overall, but only a fraction hold USDC.) Community commentary suggests trustlines may exceed 1.5 million by 2025.
USDC on Stellar | Source: USDC.cool
Institutional Partnerships & Integrations
On/off ramps – MoneyGram: MoneyGram has integrated Stellar’s USDC to allow cash to crypto conversions. Users worldwide can cash in or cash out USDC at thousands of MoneyGram locations, leveraging Stellar’s network rails. (MoneyGram operates in 180+ countries, greatly expanding Stellar’s reach.)
Exchanges and wallets: Several crypto platforms support Stellar USDC. For example, Asia’s Liquid exchange (Japan/Singapore) was the first major exchange to enable USDC withdrawals on Stellar, giving users faster, cheaper exits than on Ethereum. Many global fintechs and wallets list Stellar USDC: Alchemy Pay, Alfred, Banxa, MoonPay, Nium, Rehive, and others. Circle’s APIs and Mint platform natively issue USDC on Stellar, so institutional treasuries and custodians can integrate USDC in their workflows across chains.
Other partners: Institutional initiatives around Stellar USDC include (a) Aid and inclusion projects, like the UN’s use of Stellar Aid Assist (Stellar Dev. Foundation + Circle + MoneyGram + Vesseo) to distribute USDC aid, and (b) Enterprise pilots, such as banks exploring programmable USD transfers using Stellar’s liquidity. (Stellar’s emerging Soroban smart contracts also may enable future DeFi/treasury use of USDC.)
Excited to announce that Stellar on & off-ramps are now live on @slashapp!
Now, with the Slash business banking platform you can:
💸 Pay contractors and vendors in USDC 🤝 Accept USDC from your customers 🔁 Enjoy automatic USD <> USDC conversion. No exchange account required! pic.twitter.com/PC9W4Ng83O
Is XLM the Ultimate Solution to Cross-Border Money Transfer Challenges?
Cross-border payments are notoriously slow, expensive, and unevenly accessible. For instance, in Tanzania, sending $200 abroad costs an average of $115, which equates to a fee of 57% of the amount sent, one of the highest rates globally.
Stellar offers a very different path:
Speed: Payments confirm in 3–5 seconds, no matter the distance.
Low cost: Average fees are fractions of a cent, not dollars.
Accessibility: Users only need a mobile wallet and internet access, no bank account required.
Cash access: With partners like MoneyGram, people can still deposit or withdraw cash in 180+ countries, bridging digital and physical money.
Stable value: Assets like USDC on Stellar give users dollar exposure without volatility, making it practical for real-world use.
For freelancers, migrants sending remittances, or families in underserved regions, Stellar provides a system that feels closer to messaging apps than traditional banking — instant, simple, and inexpensive.
While global adoption is still growing, Stellar shows how blockchain can shift from speculation to solving everyday problems in finance. For many users, that makes XLM less of a “crypto bet” and more of a gateway to real financial inclusion.
Conclusion
Stellar began as an answer to slow and expensive cross-border payments.
Its currency, Lumens (XLM), keeps value in motion by linking different financial systems. It also provides the liquidity needed to settle transfers quickly at low cost.
The project’s main purpose is to widen financial access, especially for communities that remain underserved.
With global cross-border payments generating up to $200 billion annually in fees and FX margins, Stellar’s mission has never been more relevant. Protocol 23 prepares the network for heavier traffic by boosting scalability and developer readiness. Institutions have already taken interest, and projects like PYUSD or EURCV strengthen that momentum.
Tokenized assets such as U.S. Treasuries and real estate point to another use case: connecting the old world of finance with digital markets.
At the same time, growth in stablecoins and DeFi shows the network’s role goes beyond trading. In some regions, wallets like Meru give people practical tools to manage savings and even earn yield.
Looking ahead, Stellar’s priorities are straightforward. It plans to scale efficiently, bring more enterprises on board and deliver tools that meet real financial needs. Payments remain central, but the scope is widening.
Tokenization, decentralized finance and partnerships now tie Stellar more closely to global commerce. That evolution makes it more than a fast settlement system. It is turning into part of the foundation for tomorrow’s financial infrastructure.
The roadmap makes the next steps clear. Block times are being cut, so transactions settle faster. Throughput is climbing as well, giving space for heavier use when traffic picks up. New payment flows are also coming in, letting companies move more of their work straight onchain.
For builders and everyday users, tools like Freighter, the Lab updates and Stella AI should make it easier to test ideas, manage wallets and actually use what gets built.
There is also a wider push under way. Token standards are being written, and governance is being tightened, both aimed at expanding what people can do with Stellar. That includes issuing assets, linking into business systems and bridging to real-world finance. In practice, it shows a project that is not standing still.
Today it may be known for quick transfers, but the work points toward something bigger, a base that could carry global payments and new financial tools in the years ahead, whether in large economies or in places still working toward wider access.
FAQs
What countries are most active on the Stellar network?
Stellar sees high activity in regions like Latin America, Africa, and Southeast Asia, where cross-border payments are critical.
Does Stellar have smart contract support?
Yes, Stellar introduced smart contracts through Soroban, designed for efficiency and scalability.
What wallets can store XLM securely?
XLM can be stored in wallets such as Lobstr, Ledger, or Solar Wallet, which support Stellar transactions.
Is Stellar an inflationary or deflationary system?
Stellar removed its inflation mechanism in 2019, so Lumens have a fixed supply.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Dr. Lorena Nessi is an award-winning journalist and media technology expert with 15 years of experience in digital culture and communication. Based in Oxfordshire, UK, she combines academic insight with hands-on media practice.
She holds a PhD in Communication, Sociology, and Digital Cultures, and an MA in Globalization, Identity, and Technology.
Lorena has taught at Fairleigh Dickinson University, Nottingham Trent University, and the University of Oxford. She is a former producer for the BBC in London, with additional experience creating television content in Mexico and Japan.
Her research focuses on digital cultures, social media, technology, capitalism, and the societal impact of blockchain innovation.
She has written extensively on digital media and emerging technologies, with her work featured in both academic and media platforms. Her Web3 expertise explores how blockchain technologies shape culture, economics, and decentralized systems.
Outside of work, Lorena enjoys reading science fiction, playing strategic board games, traveling, and chasing adventures that get her heart racing. A perfect day ends with a relaxing spa and a good family meal.
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