The IBM and Stellar (XLM) partnership

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The IBM and Stellar partnership was announced in October 2017. In a breakthrough for payments technology, IBM and a network of banks have begun using digital currency and blockchain technology to move money across borders.

The new blockchain banking process is also notable because the banks will initially rely on a digital currency, known as Lumens, to facilitate the cross border payments. The Lumens are created by a non-profit company called Stellar, founded a Jed McCaleb, a well known figure in the payments and cryptocurrency world.

See the Block Zero interview with Stellar Founder, Jed McCaleb for more insights into the future use case of Stellar Lumens.

What is Stellar (XLM)?

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Stellar was originally a fork of Ripple, but is now based on entirely new code. Stellar.org connects people to low-cost financial services to fight poverty and develop individual potential.Stellar is a decentralized protocol for sending and receiving money in any pair of currencies.

This means users can, for example, send a transaction from their Yen balance and have it arrive in Euros, Yen, or even bitcoin. We’re expecting to support the usual categories of transactions: payments to a merchant, remittances back home, or rent splits with a roommate. You can hold a balance with a gateway, which is any network participant you trust to accept a deposit in exchange for credit on the network.

IBM leaks blockchain files on global financial transactions networks

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Please note that all of this information is purely speculative and there has been no confirmation from IBM regarding the accuracy of these documents.

Update: IBM has released their Programmable Money whitepaper.

IBM is currently looking to create the IBM Enterprise Blockchain which will:

1. Create a secure, scalable industrial-strength deployment model with core services: ledger, asset registry, identity, settlement, wallet, etc.
2. Extend IBM’s industry leadership, global relationships, technology assets, and delivery experience to build new transactional business networks
3. Establish IBM as the #1 enterprise Blockchain delivery partner in the world

IBM has developed a new universal payment network using Blockchain technology, supporting real time, multi-asset clearing and settlement with an initial focus on cash management, FX and cross border payments. The initiative will commence live transaction processing across twelve corridors in seven distinct currencies within the South Pacific Region beginning October 2017”

So far, they have prototyped a universal payment solution to support multiple payments with a low fee structure, low operating costs and real time settlement.IBM plans to utilise Stellar is through their settlement ledger for bridging currencies for foreign exchange and alternative currencies/assets.

With their partners and clients, IBM is currently evaluating the operational integrity of the platform, take an inside-look at the technology & business models, and assess the potential for first-mover advantages.

The draft timeline indicates that the MVP was launched in October 2017 with a completion date of 31 January 2018. They are likely conducting reviews of their testing and are due for a open global test network launch soon this month (February 2018). You can see further details of the timeline below:

See more of the leaked IBM blockchain network files here.

Impact on Stellar

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Source: Stellar Roadmap 2018

Cryptovate sees this as a bullish catalyst for Stellar as the IBM Enterprise Blockchain beta test has a target goal of $1bn in transaction value, 7 currencies settled and over 10 corridors transacted in. The IBM plan indicates that there will be a mass adoption of Stellar by over 10 banks worldwide and will truly disrupt cross border payments.

Additionally, FairX will push further adoption of Stellar with their fiat-crypto exchange with Lumens. It is still not clear whether this exchange will be linked to IBM’s blockchain networks for settlement purposes but there is a possibility.

Stellar has also recently released their 2018 roadmap which indicate plans for a decentralized exchange and implementation of the lightning network. With the ability to continue scaling, Stellar remains a promising alt-coin for 2018.

Follow our Steemit blog, @Cryptovate for daily cryptocurrency analysis, insights and opinions.

Resources

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Stellar’s Official Website
Stellar’s Whitepaper
Stellar Wallets
Stellar CoinMarketCap
r/Stellar
IBM Programmable Money Whitepaper

Recent media:
CNBC — There’s a new hottest cryptocurrency of 2018 so far: stellar
Forbes — Crypto Watch: Stellar Lumens (XLM) Price Rockets 54% In 16 Hours, Overtaking EOS And NEO
NASDAQ — Look Out Bitcoin, Here Come Cardano and Stellar
Fortune — IBM and Stellar Are Launching Blockchain Banking Across Multiple Countries

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Disclaimer: Research publications are furnished by independent authors on the Cryptovate team. You are not obtaining any advice from Cryptovate Investments. You should always consult with your advisers before making any investment decisions and should you have any questions as to the laws that govern our cryptocurrency research, you should consult with your legal or investment advisers.