As we inch closer and closer to the end of what has been a stellar year, we greatly anticipate the major announcements that IBM’s Michael Dowling, Group CTO and Chief Architect for Blockchain Financial Services, referred to in his Reddit post a month ago about their partnership with Stellar.

In light of this, we’re going to do a quick recap below to remind everyone what is in store for 2018.

Here are the key takeaways:

IBM and Stellar have a common purpose to fix a genuine problem and they are determined to stick together to make this happen

Michael Dowling – “The IBM/Stellar Universal Payment Solution represents a shift in the way traditional – and now non-traditional – financial institutions can send value around the world with as little fraction as legally possible….The folks at Stellar, like us, want to see the world move past the 40 + year old fragmented system that we all suffer in today, but move towards a system that is more fair and equitable for all.”

“This partnership is not just long term – it’s tight. Stellar joined the Hyperledger Foundation in addition to partnering on this project. There are many upcoming projects coming up this year about to be announced.”

Stellar Lumens (XLM / STR) is already active and being used in very practical ways. Volume will only increase as more partnerships are announced. Results will be seen very soon – Q1 2018.

Michael Dowling – “XLM, while relatively small today, is growing fast. More and more people are using Lumens and trading them actively. We have a strong desire (and requirement) to open the market for fiat to XLM at the institutional level.”

“We have 1 major market maker right now, and 14 major institutions involved in direct or indirect capacity on the network. Starting in Q1 2018, you should see more of those institutions redirecting payment traffic on the network.”

Stellar Lumens has a major advantage over other cryptocurrencies because:

It is steps ahead of Bitcoin as it is already compliant with regulation.

It has a proven model unlike Ethereum as it already has the unique technology to issue any asset directly

Michael Dowling – “A very unique capability with Stellar is the ability to issue an asset directly on the network, and specify how that asset is managed on the network and what nodes validate and confirm transactions. That means we can work with other parties – such as traditional fiat currency issuers (stay tuned) …Together with the technology developed at IBM, the ability to clear transactions with very fast settlement using Lumens was a no-brainer and a perfect match. Together, traditional and non-traditional financial institutions can settle using a cryptocurrency with those transactions directly tied to counter-terrorism financing, AML and KYC processes required by regulators around the world. Basically, it’s the missing piece those institutions need to move forward transacting with cryptocurrencies.”

XLM allows for any financial instrument to be transferred as a type of ‘money’ to anyone in the world, for free, instantly, and in any currency. This is not just automation, it is revolutionary.

While Bitcoin has contributed the following:

Stores, proves possession and transmits value
Converts real-world resource (electricity) into a digital asset
Provides an immutable public record solving the double spend problem

Stellar Lumens solves the remaining problems by:

Digitally representing existing currencies and assets
Making payments interoperable across institutions and currencies
Providing a highly scalable system with 3-5 seconds to confirm transactions

In other words, Bitcoin was designed to be a new currency, not to be a unifying universal payment network.

From an investor’s perspective, XLM will be used in every transaction so demand for XLM units will increase.

“XLM is used to settle cleared transactions for FX. Fiat currency is buying XLM (and vice-versa) as part of FX transactions. It will work something like this: Person A, who has USD, wants to pay a farmer (Person B) in Fiji, who wants Fiji Dollars. Person A tells their institution to execute that transfer of value. The institution debits their USD account based on the quote from USD -> XLM -> FJD, and sends XLM to the recipient institution, who then chooses to hold their XLM for other transactions or immediately sell them to a market maker. This is the first step to creating a world where excess capital, in whatever denomination, can be used to invest in any other jurisdiction.”

“However, it doesn’t stop at FX only. The purpose is for a clearing ledger that not only clears FX transactions, but really, any transaction resulting in a transfer of value. So think cash for securities or t-bills for asset-backed assets. Any financial instrument can be used as ‘money’. IBM’s vision is to allow the legal, safe, compliant payment using any asset for any asset globally.”

“XLM is one of the assets on Stellar. It’s also used to ‘pay’ for transactions on the network. So XLM has 1) value and 2) utility. There will be other assets. So, for example, let’s say that a fictional island nation called Stellarisle has a central bank, and that central bank wants to issue currency assets on Stellar. In that case, Stellar is used, and XLM is used to power those transactions for those assets, even though XLM isn’t directly used as the settlement mechanism. It doesn’t matter if XLM is the settlement mechanism. Rather what really matters is 1) the safest settlement mechanism is used for two transacting parties, and 2) XLM is still used even as a utility.

BTC 19qe2QT2NzCeYJmwxqtDB8nKkphaWwyKtG
XLM GB6YPGW5JFMMP2QB2USQ33EUWTXVL4ZT5ITUNCY3YKVWOJPP57CANOF3