Unifying Layer Between All Payment Systems and All Currencies

Financial IT had a very pleasant conversation with Jed McCaleb, CTO and cofounder of Stellar.org

Financial IT: Could you please give us a brief introduction about Stellar?

Jed McCaleb: Stellar is a nonprofit organization that supports the Stellar network, a free, open-source network that connects diverse financial systems and lets anyone build low-cost financial services—payments, savings, loans, insurance—for their community. The Stellar network enables money to move directly between people, companies and financial institutions as easily as email. This interconnectivity means more access for individuals, lower costs for banks, and more revenue for businesses.

Financial IT: What is special about Stellar? And what value do you bring to your target audience?

Jed: One of the unique things about Stellar is that we are a non-profit, we believe that the world’s financial infrastructure is so important it should function more like a public utility, such as the internet, and shouldn’t be owned by one for-profit entity.

Our current financial infrastructure dates from the pre-Internet days. Siloed financial systems and channels prevent currency from traveling efficiently. Email used to have the same limitations -- previously, only people within the same network could email one another, but that changed when email networks connected around an open standard, also known as a protocol. As with email, the best way to streamline remittances is to connect the backend infrastructure for financial institutions with an open protocol.

Stellar is an open-source financial protocol that connects diverse financial institutions, it acts as a unifying layer between all payment systems and all currencies. You can think of Stellar as an open-source SWIFT-like network that allows connected organizations to transact with one another, link siloed financial institutions and services and reduce the friction that contributes to higher fees. In a pilot, the Stellar network was used to perform 6 million transactions for a total cost of $.20 cents (if those transactions were done using traditional wire transfers, it would’ve costed over $150 million). Within the Stellar network transactions are settled in 3-5 seconds, for fractions of a cent in a safe and secure network environment. Additionally, due to the fact that Stellar is open-source, developers are able to build local apps that are relevant to the financial and social needs of their own communities.  

Financial IT: Can you mention a real-life case of Stellar in use?

Jed: Stellar can be used by any financial institution, such as microfinance institutions, banks, startups and more. Below are a few case studies that show the range in use cases for the Stellar network.

  • Oradian, a fintech company that provides core-banking software for local financial organizations in West Africa, used Stellar to launch a low-cost live payment transfer network among microfinance organizations in Nigeria. This network will reach a total of 200 branches and serves over 300,000 end clients (over 90% are women), mainly in rural areas across Nigeria. This will enable MFIs to transfer money between their branches seamlessly.

  • Deloitte, one of the largest accounting and consulting firms in the world, has used Stellar to build an application for one of its banking customers that will facilitate cross-border payments.

  • Coins.ph, a leading mobile financial services provider for the underbanked in Southeast Asia, integrated with Stellar to enable global remittances to anyone in the Philippines using a Stellar wallet or from any institution connected to the Stellar network.

  • Flutterwave, a cutting-edge pan-African financial technology and services company, is using Stellar to support cross-border payments for M-Pesa, a mobile platform for money transfer and financial services. For the 21 million M-Pesa users who are limited to transacting in Kenya, this move will expand their ability to send payments regardless of whether they are based in Kenya, Ghana or Nigeria.

  • ICICI Bank, India’s largest private sector bank by consolidated assets, is using the Stellar network to support money transfers internationally and within India. ICICI Bank is working to launch a pilot program on Stellar for cross-border payments without traditional wire fees.

  • Tempo Money Transfer, a high-tech European licensed remittance provider headquartered in Paris, France, has integrated with the Stellar network, which will allow people to send global remittances from Europe  to financial institutions globally that are connected to Stellar, such as Coins.ph in the Philippines.

Financial IT: In your opinion what trends, issues and challenges are there in payments industry? How does Stellar address those challenges and innovations?

Jed: As mentioned above, due to legacy technology, our current financial infrastructure is too costly, which leaves millions on the sidelines. Over 2.5 billion people worldwide are unbanked, specifically those in developing countries. One of the most important applications that is generally highlighted about blockchain technology is its potential to bring financial services to the underbanked. However, up to this point, the benefits of blockchain have largely served technologists and the Bitcoin community. With Stellar, we’re using blockchain technology towards financial inclusion to bring services, such as banking, micro payments, and remittances to people who’ve never had access to them previously.

Financial IT: What are the upcoming milestones you have for Stellar?

Jed: We plan to continue growing the Stellar network and partnering with innovative financial institutions and organizations to bring financial services to communities that are underbanked, as well as achieve our mission of enabling a worldwide financial network that anyone can use.

In the short-term, our specific goals are to increase the remittance volume flowing into the Philippines via Stellar, and open up some markets in Africa, particularly Nigeria and Kenya, to low-cost cross-border payments flows via Stellar.


Jed McCaleb is the CTO and cofounder of Stellar.org, where he leads technical development. Jed believes in consciously leveraging technology to reduce inefficiency and improve the human condition. He created eDonkey, one of the largest file-sharing networks of its time, as well as Mt. Gox, the first Bitcoin exchange and in 2011, Ripple. Recognizing that the world’s financial infrastructure is broken and that too many people are left without resources, he cofounded Stellar Development Foundation in 2014. Jed is also an advisor to MIRI, which researches artificial intelligence for positive impact.

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