“Money moves like information now.”
– Jed McCaleb, co-founder of Stellar.
Traditional banking is slow, expensive, and leaves many unbanked. Stellar Lumens (XLM) changes that by enabling near-instant, low-cost global transactions. It connects financial systems, making money as easy to send as an email.
But how does Stellar Lumens work? Built on the Stellar network, it uses a decentralized Stellar blockchain name to bridge digital and traditional currencies. With low fees and fast speeds, it’s a game-changer for cross-border payments.
Whether you’re an investor, developer, or just curious, understanding Stellar Lumens is key. This blog will cover its purpose, technology, use cases, and how you can start using it today.
Stellar Lumens (XLM): The Future of Fast, Low-Cost Transactions
You know how frustrating slow, expensive international transfers can be. What if sending money was as easy as sending an email? That’s exactly what Stellar Lumens (XLM) aims to do—bridge traditional finance and blockchain for fast, low-cost payments.
What is Stellar Lumens (XLM)?
- Founded in 2014 by Jed McCaleb (co-founder of Ripple) and Joyce Kim, Stellar was designed to connect financial institutions and individuals worldwide.
- Unlike Bitcoin, which focuses on decentralization, Stellar Lumens powers the Stellar network to move money seamlessly across borders.
- XLM serves two key roles: preventing spam transactions and enabling smooth currency conversions, making cross-border payments efficient and affordable.
Why Should Businesses Care?
- Transaction fees on Stellar are nearly zero—just 0.00001 XLM per transaction, making it far cheaper than traditional banking systems.
- Settlement times are under 5 seconds, compared to SWIFT transfers that take days.
- Stellar’s decentralized network supports multiple currencies, allowing businesses to send and receive payments in various forms without intermediaries.
But how does all this magic actually happen? Let’s peek under the hood and see how Stellar works.
How Does the Stellar Network Work?
Sending money across borders is often slow and expensive. What if there was a way to make transactions instant and nearly free? That’s where Stellar Lumens (XLM) and the Stellar network come in. But how does it actually work?
Stellar’s Unique Way of Approving Transactions
Unlike Bitcoin or Ethereum, Stellar doesn’t rely on mining to confirm transactions. Instead, it uses the Stellar Consensus Protocol (SCP), which lets trusted validators approve transactions in seconds.
- This system is faster than traditional banking because transactions settle in under five seconds.
- It’s also more energy-efficient than blockchains that depend on mining.
- Since no single entity controls the network, Stellar stays decentralized and secure.
Anchors: The Key to Connecting Banks and Crypto
To make Stellar useful in the real world, trusted financial partners, called anchors, act as bridges between crypto and fiat money.
- When you deposit money with an anchor, you get a digital version of that currency on Stellar.
- This allows businesses to accept payments in multiple currencies without needing traditional banking infrastructure.
- It also makes cross-border payments instant and hassle-free.
A Transparent and Decentralized Ledger
Every transaction on the Stellar blockchain is recorded on a public ledger, making the system transparent and secure.
- This reduces fraud and ensures every transaction is verifiable.
- You can send one currency and have it arrive as another, with conversions happening automatically.
- The goal? Make money move as easily as email—without high fees or long wait times.
By combining speed, security, and low costs, the Stellar network is revolutionizing cross-border payments. Businesses can now move money globally—without the friction of traditional banking.
Alright, you’ve seen the engine. Now, what are the special features that really make Stellar shine?
Core Features of Stellar Lumens That Make It Stand Out
Stellar Lumens (XLM) isn’t just another cryptocurrency—it’s designed for fast, low-cost, and efficient cross-border transactions. Here’s what makes it different.
1. Low Transaction Fees
Sending money on the Stellar network costs almost nothing—just 0.00001 XLM per transaction (less than a fraction of a cent).
- This makes Stellar ideal for businesses handling frequent transactions without losing profits to high fees.
- Even during network congestion, costs stay low, unlike Ethereum or Bitcoin.
2. High Speed
Stellar processes up to 1,000 transactions per second (TPS), settling payments in under five seconds.
- Compare that to Bitcoin’s 10-minute confirmation time—Stellar moves money in real-time.
- Businesses can integrate Stellar for instant payments and better customer experience.
3. Multi-Asset Support
Stellar isn’t limited to XLM—it supports stablecoins, cryptocurrencies, and tokenized assets.
- You can send USD and have it received as EUR, BTC, or even a stablecoin.
- This makes cross-border payments effortless and eliminates currency conversion headaches.
4. Built-in Compliance Tools
Stellar includes Know Your Customer (KYC) and Anti-Money Laundering (AML) features to support regulatory compliance.
- Financial institutions can easily verify users and prevent fraud.
- Businesses get seamless global transactions while meeting compliance standards.
5. Smart Contracts for Secure Transactions
Stellar supports simple smart contracts, allowing businesses to automate payments, escrow services, and conditional transactions.
- These contracts execute without the complexity of Ethereum’s system.
- Businesses can streamline operations without worrying about coding-heavy solutions.
6. Energy-Efficient and Eco-Friendly
Unlike Bitcoin’s mining process, Stellar uses a lightweight consensus model that consumes minimal energy.
- This makes it a sustainable solution for businesses looking for eco-friendly blockchain alternatives.
- With increasing regulations on crypto energy use, Stellar offers a future-proof payment network.
So, those are the cool features, right? But how are businesses actually putting them to work? Let’s look at some real examples.
How Businesses Are Using Stellar Lumens Today
Stellar Lumens (XLM) isn’t just theoretical—it’s actively transforming global finance by making transactions faster, cheaper, and more accessible. Here’s how businesses are using it today.
Cross-Border Payments: Fast and Affordable Remittances
Millions of people rely on remittances to send money across borders, but traditional methods are slow and expensive. Stellar cuts transaction costs to nearly zero and completes transfers in seconds.
MoneyGram partnered with the Stellar Development Foundation to integrate the Stellar blockchain into MoneyGram’s network, enabling cash funding and payout in local currency with Stellar USDC, complete with near-instant backend settlement capabilities.
Tokenization of Assets: Issuing Stablecoins and Digital Assets
Stellar allows businesses to create digital versions of fiat currencies, real estate, and other assets. Circle launched USDC on Stellar, enabling fast, low-cost transactions. Governments are exploring CBDCs (Central Bank Digital Currencies) on Stellar’s network.
Decentralized Financial Services: Microloans, P2P Lending, and Digital Wallets
Access to banking is limited in many parts of the world. Stellar is changing that with decentralized finance (DeFi) solutions. Apps built on Stellar offer micro-loans and peer-to-peer (P2P) lending without intermediaries. Digital wallets powered by Stellar help users store, send, and receive funds with ease.
Corporate Adoption: IBM, MoneyGram, and Circle
Major companies are leveraging Stellar’s network for real-world financial applications. IBM launched World Wire, a real-time global payments system built on the Stellar network, aiming to replace the legacy correspondent banking system with simple point-to-point transactions.
Carbon Credit Trading: Transparent and Efficient Marketplaces
Sustainability-focused companies are using Stellar to track and trade carbon credits. The Verra-certified carbon market on Stellar ensures transparency and prevents fraud. Businesses can offset emissions with verified digital assets.
Aid Distribution: Faster Relief for Crisis Zones
Humanitarian organizations use Stellar to distribute aid instantly and securely. The UN’s World Food Program tested Stellar for direct cash transfers to refugees. Blockchain-based aid reduces fraud and ensures every dollar reaches those in need.
Ready to get your hands on some XLM? Let’s walk through the simple steps to buy, store, and use it.
Getting Started with Stellar Lumens: Buy, Store, and Use XLM
So, you’re interested in Stellar Lumens (XLM) and wondering how to get started? Whether you’re buying, storing, or using XLM, it’s simpler than you think. Here’s what you need to know.
Where to Buy XLM
- Centralized Exchanges (CEXs): Major platforms like Binance, Coinbase, and Kraken let you buy XLM using fiat currency or other cryptocurrencies. Most require KYC verification.
- Decentralized Exchanges (DEXs): Platforms like StellarTerm allow you to trade XLM directly without intermediaries.
- Peer-to-Peer (P2P) Platforms: Some exchanges, like Binance P2P, let you buy XLM directly from other users using various payment methods.
Secure Storage Options
- Hardware Wallets: Ledger Nano S and X offer the highest security by keeping your private keys offline.
- Software Wallets: Lobstr, StellarTerm, and Solar Wallet provide easy access while maintaining security.
- Exchange Wallets: While convenient, storing XLM on exchanges can be risky due to potential hacks. Always enable 2FA and withdrawal whitelisting for extra security.
Utilizing XLM for Transactions
- Fast and Low-Cost Payments: XLM enables near-instant transactions with fees as low as 0.00001 XLM per transaction. Businesses use it for cross-border payments and payroll processing.
- Remittances: With partners like MoneyGram, users can convert cash to XLM and send it globally at minimal cost.
- Smart Contracts and Tokenization: The Stellar network supports custom tokens, stablecoins, and DeFi applications, making XLM a key asset in blockchain-based financial services.
- Enterprise Adoption: Companies like IBM and Circle leverage Stellar for settlements and financial services, proving its reliability in large-scale operations.
Before purchasing XLM, always check regulatory guidelines in your region and use reputable platforms to ensure security.
You’ve got the basics. Now, how can you actually build something with Stellar? That’s where Codewave can step in and help.
Codewave’s Role in Stellar-Powered Solutions
Codewave is a design thinking-led digital innovation company that helps businesses adopt emerging technologies like blockchain to drive real-world impact. With a strong focus on scalability, security, and user-centric solutions, we empower organizations to integrate Stellar Lumens (XLM) into their financial and operational ecosystems.
From cross-border payments to tokenized assets, we provide end-to-end support, ensuring seamless adoption of Stellar-powered solutions.
Why Trust Codewave?
- 300+ Successful Projects – Delivered across industries, including fintech and blockchain.
- 10+ Years of Experience – Proven track record in digital transformation and emerging technologies.
- 50+ Blockchain Implementations – Helping businesses adopt decentralized solutions.
- 95% Client Retention Rate – Showcasing long-term partnerships and client satisfaction.
Key Services for Stellar-Powered Solutions
- Blockchain Implementation – Secure, scalable Stellar-based financial solutions.
- Cloud Infrastructure – High-performance cloud setups for Stellar applications.
- Custom Software Development – Tailored platforms for payments, asset tokenization, and remittances.
- Data Analytics Development – Insights-driven decision-making for blockchain transactions.
- IT Consulting – Strategic advisory for Stellar adoption and compliance.
- Process Automation – Smart contracts and automation using Stellar’s Soroban technology.
What’s next? Let’s take a peek at where this technology is heading.
The Future of Stellar Lumens: Where It’s Headed
Stellar Lumens (XLM) is making big moves in the financial world, especially in cross-border payments. More businesses and banks are adopting its blockchain, which could push its value up. Experts predict that by 2025, XLM’s price could range between $0.31 and $0.91, possibly reaching $1.44 if adoption keeps growing.
Looking ahead, things get even more exciting. By 2030, some forecasts suggest XLM could hit anywhere from $1.3 to $10.8, with an average around $6—over 2,100% higher than today. That kind of growth would mean Stellar is becoming a major player in digital finance.
With blockchain adoption rising and more institutions seeing its value, Stellar Lumens has a real shot at reshaping global transactions. If businesses keep jumping on board, XLM could be one of the key networks powering the future of money.
Final words
Stellar Lumens is changing the way money moves across borders. It’s fast, cheap, and works without relying on banks, making global transactions easier for everyone.
Since it’s decentralized, you don’t have to worry about middlemen or high fees. Whether you’re sending money abroad or running a business, Stellar Lumens helps you do it securely and at a fraction of the cost.
As digital payments grow, Stellar is only getting stronger. If you want a reliable way to move money worldwide, this is worth exploring. Need help integrating blockchain payments? Contact Codewave now.
Also read: Top 5 Blockchain Platforms for Asset Tokenization
