Stellar Lumens is looking for “anchors”

Stellar Lumens is looking for an "anchor", a partner, that will facilitate the transition from the traditional banking system to cryptocurrencies. Anchors provide two essential services for the Stellar network: access and egress from cryptocurrencies to fiat currencies and vice versa. The Stellar Development Foundation released a summary of a recent webinar that discussed the role of anchors and the Stellar Lumen Network in building new payment standards. According to the Japan Financial Development Foundation, Stellar and its Anchor will establish a partnership in 2025 to unify disparate payment systems and facilitate the transition from traditional financial systems to Stellar. "Network Transition.

To facilitate moving value from the traditional banking system into Stellar and vice-versa, the network relies on what we call anchors. Anchors play a fundamental role in creating a decentralized, interoperable global financial system.

How does Stellar Lumens build a new payment standard?

The anchors, as stated, are the key to the new payment standard that Stellar has set out to create. Anchors are regulated financial institutions, money service businesses or, as the SDF claims, fintech companies. Anchors serve two important functions for the Stellar network.

Anchors are also a gateway for fiat money users to enter and exit the Stellar network tokens. In addition, anchors are important because they connect the Stellar network to the banking system of the country in which it operates. Therefore, anchors need to be regulated and operate with a Know Your Customer (KYC) process that allows users to make quick deposits and withdrawals, as the SDF states:

First, the anchors operate as an issuer of fiat-backed tokens, known as stablecoins, which serve to provide liquidity to users of the Stellar network. In other words, they serve the function of a bank and maintain the fiat money reserves.

As reported by CNF, Stellar Lumens has been working to bring its payment network into line with established laws and regulations. Therefore, in early June, it partnered with Elliptic to create a compliance tool. Stellar has established that the only way to move towards mass adoption is to have the fundamental tools of compliance.

As the critical link between the Stellar network and the traditional banking system in their respective countries, anchors are positioned to leverage a variety of business models and monetization strategies, including deposit/withdraw fees, FX spread, seigniorage, and transaction fees.

In that sense, the Stellar Development Foundation called on companies and institutions interested in becoming anchors. Those interested should email the following address partnerships@stellar.org. The company has to indicate the business model, if they have the required licenses and permits in their jurisdiction. In addition, interested parties must have a KYC process and a connection to a bank, be connected to the Stellar network, and be integrated into an ecosystem portfolio.

Author : Reynaldo