Stellar (XLM), a cryptocurrency token, has experienced a significant increase in value of 11.5% between September 2 and September 8, even as Bitcoin and other altcoins have been facing a downward trend. This surge in price came after Stellar tested its lowest support level of $0.113 in the past eight weeks. The price increase followed a vague announcement made by the Stellar organization on social media. The announcement hinted at something significant happening on September 12, with phrases like “something cool is dropping” and “change” on the horizon.
Additionally, on September 7, Stellar further heightened expectations by teasing a potential partnership. The announcement was again lacking in specific details, using words like “brand” and “real world,” suggesting a possible rebranding and a shift towards real-world assets like stocks, bonds, and real estate.
The significance of real-world assets and their tokenization on blockchain technology was emphasized by Caroline Pham, one of the commissioners of the Commodity Futures Trading Commission, on July 17. Pham highlighted the opportunities for modernizing financial markets through the tokenization of money market funds on the blockchain.
However, it is important to note that the rumors circulating about Elon Musk’s involvement with Stellar are unfounded. Despite Musk’s company X (formerly Twitter) obtaining a currency transmitter license, there is no evidence to suggest integration with XLM. Furthermore, even if multiple cryptocurrencies were integrated, Stellar’s current market capitalization falls short of making it a top contender. Its trading volume also ranks 20th among cryptocurrencies, trailing behind competitors like Bitcoin Cash (BCH), Sui (SUI), Litecoin (LTC), and Ripple’s XRP.
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In mid-August, the Stellar Development Foundation (SDF) became a minority investor in payments provider MoneyGram International using its cash treasury. SDF had previously established a commercial partnership with MoneyGram in 2021. According to the CEO of SDF, Denelle Dixon, this investment will contribute to MoneyGram by expanding its digital business and exploring blockchain technology.
Stellar is also preparing to deploy a smart contract platform called Soroban on its mainnet. The company launched a $100 million adoption fund in October 2022 to encourage developer activity for applications on its Futurenet testnet. These initiatives indicate that Stellar is positioning itself to compete in the decentralized application market, which is valued at $37.8 billion. Despite Ethereum’s dominance in this market, Stellar is making strides to establish itself as a viable competitor.
The potential of real-world assets in decentralized finance is exemplified by MakerDAO’s holdings of U.S. Treasuries, which have boosted the protocol’s revenues and mitigated the increased exposure of its stablecoin, Dai, to USD Coin.
While investors eagerly await the announcement on September 12, it is important to note that concrete evidence is needed to determine the potential of this payment network. The likelihood of achieving significant gains to surpass the previous price of $0.14 remains uncertain until more information emerges.
Disclaimer: This article is for general information purposes and should not be taken as legal or investment advice. The views expressed are solely those of the author and do not necessarily reflect the views of Cointelegraph.
