Having one major CBDC deal under its belt gives Stellar a lot of credibility in terms of its blockchain platform. The market began to realize that Stellar had a good chance at being adopted as a platform technology for central bank development throughout the world. The deal with the Ukraine Ministry of Digital Transformation helped push up Stellar to the 40-cent value level. DLT is the same thing as blockchain technology such as Stellar’s protocol. The idea was to study the ability of distributed ledger technology (DLT) to process large-scale payments. In a recent report by KPMG cited the European Central Bank and the Bank of Japan initiative called ‘Project Stellar‘. The work involves “development of the infrastructure for a Ukrainian national digital currency.” This is what is called a CBDC or Central Bank Digital Currency. The Stellar Development Foundation, which supports the Stellar protocol, announced in early January 2021 that it had signed a deal with Ukraine’s Ministry of Digital Transformation. So when cryptos move Stellar tends to move much more than the larger cryptos. However, in the last year, Bitcoin has risen 478% whereas XLM has jumped 623%, up from 5.63 cents a year ago. So Stellar has risen commensurately with Bitcoin in the past month but has outperformed since the beginning of the year. This compares with a gain of just 69.12% for Bitcoin year-to-date and 53.5% in the past month. In fact, even in the last month, it is up 56.5% from 26.16 cents on Jan. So far this year Stellar has appreciate 209% from 13.24 cents at the end of 2020. However, other than Tether, which is at $1.00, it is the highest priced alt-crypto below $1.00. For example, Dogecoin is another alt cryptocurrency that is popular but it costs less than 6 cents. The Stellar Lumens coins cost about 40.9 cents which makes XLM more expensive than a number of alt currencies. That balance is directed under SDF’s mandate to spend or distribute to enhance and promote Stellar. Instead, out of a total 50 billion Lumens, 20 million were released into the market while the Stellar Development Foundation (SDF) held the 30 billion XLM balance. The 100 billion XLM initially created were slashed by half after a deflation mechanism was put in place to counter the 1% yearly inflation. There is no proof-of-work algorithm that has to be solved and in which XLM can be earned as rewards. One difference between Bitcoin and Stellar is that XLM cannot be mined. That raned it as the 11th-largest cryptocurrency below such crypto names as Bitcoin, Ethereum, Tether, Cardano, Polkadot, XRP, Litecoin and Chainlink. 24, XLM had a market capitalization of $9.289 billion, according to CoinMarketCap. Stellar also has a working relationship with the central bank of Ukraine.Īs of Feb. Stellar is trying to work with a number of central banks to help them create cryptocurrencies.
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