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The debate over transactional throughput for Bitcoin continues to weigh heavily in the minds of the experts (see: and Even more questionable for me is the market cap to support legitimate global transaction volume, i.e. trillions of dollars per day, which would require Bitcoin’s unit price to rise over $1 million, a seemingly unlikely level.

The momentum of “blockchain inspired” shared ledgers and smart contract platforms (ala Hyperledger, Corda, and Ethereum, etc.) has provided intellectual distraction from the politics of cryptocurrency adoption, but I see a transactional world in the not-so-distant future that relies heavily on both smart contracts and cryptocurrencies as a means of exchange, and I think we can safely agree there won’t be a single Blockchain to rule them all.

In the interim, all of us regular people just want our money to be able to move around the world as effortlessly as email—and why not?! 95% of all fiat currency is digital anyway. Domestic and cross-border payments, remittances, and correspondent banking are low hanging fruit.

The world’s recent fascination with Bitcoin isn’t coincidental. In fact, it’s indicative of the rise of digital consumers and their demand for change in the payments industry. But most payments innovation to date has been anachronistic. Even the cool stuff like Venmo and Xoom (i.e. PayPal), Revolut and Snapcash (Should Apple buy Snap?!) all depend on conventional “rails” like ACH and Wires. The financial plumbing that enables money movement hasn’t changed in a very long time.   

Of the growing variety of complex use cases that Blockchain and DLT promise to solve, cross border payments seem the ripest for disruption. Global consumers just want to be able to send and spend their money without the existing hurdles that cause delay and high fees, and there’s no technical barrier to making real time cross currency payments a reality. A company named Ripple kinda got the idea right, but their implementation and commercialization approach has caused many large banks to pass.

That’s where Stellar comes in. If you haven’t looked at them in a few months, it’s time. None of the household names in Blockchain and smart contracts have their own “native asset” (save Ethereum who really isn’t focused on any specific use cases). A “native asset” (be careful not to call it a cryptocurrency!) makes all the cross-border settlement stuff a lot easier. Plus, Stellar is open source and non-profit, so its motives and allegiances are not as questionable.

I recommend you start with Stellar’s stated mandate. It’s pretty compelling, with a philanthropic emphasis on financial inclusion and the underbanked. Then take a look at their architecture in the developer documentation. You’ll notice some similarities to Ripple (not a coincidence), but they’ve given a lot of additional thought to regulatory concerns—KYC, AML, and banking endpoint integration, which they call “Anchors”. 

By the way, the importance of last mile integration with the core systems of firms who have access to the domestic RTGS systems should not be understated. It isn’t serendipitous therefore that new FinTech regulation in the U.S. could introduce credible non-bank players to the payments, clearing, and settlement space. The Feds aren't dummies. They want to stay in front of this train, because if (or when?) a viable global cryptocurrency takes hold without a means for governance, it will be too late. What the central banks should really do is just create a digital denomination of their own fiat currency, but that’s an entirely different conversation.

I’d love to read your opinions! Oh… and you should really visit the blog of my good friend Michael Dowling (… he’s a true technical savant.

by Jesse Lund
Global Blockchain Market Development at IBM

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