The future of Stellar Lumens — going beyond payments towards a global store of value


Andre van Zyl

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November 2017 |Andre van Zyl
This article was originally published at Follow them on Twitter @clicyourworld


In November 2017 Clic.World demonstrated the world’s first Stellar ATM at the Singapore Fintech Festival, seamlessly transferring cash between Stellar Lumens (XLM), Singapore Dollars (SGD) and Uganda Shillings (UGX).

Although interesting and certainly a novelty at the time, the main purpose behind building the ATM was to practically demonstrate the concept of using XLM as a global store of value for any local fiat currency. (Shipping of the first of these Stellar ATMX units are scheduled for February 2018)

Now that we can convert cash easily into and from XLM, the question is what next? Why not use XLM as the primary store of value in the first place? If I can pay a merchant in local currency directly from XLM, why do I still need to use local fiat currency (cash in the bank) as a store of value?

This concept emerged over the last year as we were building the social banking platform on the Stellar blockchain, and was first implemented in October as part of the eSACCO Plus app for the first social banking pilot in Uganda, the eSACCO

As we have demonstrated with the eSACCO Plus app, a user can now move value seamlessly between the build-in Stellar wallet and the fiat currency e-value wallet in the app, giving a member a choice which store of value they want to use, XLM or e-value backed by cash in the bank.

To do this we developed the exchange that we have been testing successfully in Uganda for the last 4 months to allow people to buy XLM directly using MTN and Airtel mobile money using local currency (UGX).

“I can vouch for I’ve only been able to get into crypto because paying with mobile money has been a breeze.” Solomon King, Founder

The exchange also allows the ClicPay platform (expect a formal announcement on the public release of ClicPay early in the new year) to do QR based mobile payments directly between any Stellar asset and local fiat currency. In addition to accepting payments, the ClicPay merchant POSX app will also allow merchants to buy and sell XLM for cash, thereby extending the reach of the cliix exchange to even the smallest corner shop in Africa.

So, really, why would you NOT keep your money in XLM as you head off to holiday abroad?

Using XLM as a store of value have benefits for both consumers and governments. For consumers the cost and complexity of transacting locally and cross-border will be largely eliminated, and financial authorities will have better visibility over the flows of money across the economy, with much improved control over regulatory compliance.

In regions like the East African Community this will have a huge impact on cross border trade and also on inward remittances from the diaspora community.

“The emerging global sharing economy is not a vision any longer, it is a reality and it is growing fast; and a universal store of value that delivers on the promise of fast, easy, free and secure transacting, while ensuring transparency and regulatory compliance in local fiat economies, is going to be a key driver for the accelerated growth of this new economy. Stellar delivers on all of them.”

-Andre van Zyl Co-Founder Clic.World

The Stellar blockchain has already proven itself as a formidable payment platform. (Just ask KlickEx and the IBM guys!) We believe that as a global store of value it will show its real strength in the years ahead.

Here’s a few key reasons why we believe so strongly in the future of Stellar:

  1. It’s an open source, non-profit platform which ensures accountability and commitment to low cost transactions.
  2. It’s scalable with transaction times fast enough to do real-time transaction — less than 5 seconds, using the Stellar Consensus Protocol.
  3. It’s simple, robust and secure with a strong track record. It does exactly what it says on the tin!
  4. Extremely low transaction cost, and a commitment from the Stellar Foundation to regularly review and adjust these costs when needed.
  5. While there will be an expected high growth path in the short to medium term in the value of XLM, the annual 1% inflation will smooth out huge fluctuations over time leading to much more stable and sustainable growth, which are based on real world use cases rather than perception and speculation.
  6. An extremely important factor for us when we made our original decision to select Stellar, was the fact that it’s a “green” environmentally friendly blockchain that uses no mining. We believe the issue of crypto mining, which is currently consuming huge energy in BTC, ETH and other mining operations, is something that does not receive enough attention and is simply not sustainable in the long run. Here’s an interesting example of an ETH mining rig used as a heater in Russia!!! Consuming 1kW per hour, that’s 8760 kWh per year for ONE MINING RIG! Compare that to the average energy consumption in Uganda of 70 kWh PER PERSON per year!
  7. After working with the Stellar team for the past 18 months and having tested the platform as part of the world social banking eco-system for SACCOS’s and MFI’s for the last 6 months in Uganda, we are convinced that Stellar’s vision of becoming the future global “internet of value” where “money can be sent like email” is not only achievable, it will become a key driver shaping the future global financial landscape over the next few decades.