Stellar (XLM) has emerged as one of the most promising cryptocurrencies in cross-border payments. Founded in 2014 by Jed McCaleb, co-founder of Ripple, this blockchain aims to democratize access to financial services globally. Learn about Stellar, its functionality, and why this cryptocurrency is grabbing investors' attention in 2025.
Stellar is a decentralized blockchain platform designed to facilitate money transfers and cross-border payments. Launched in 2014, this financial infrastructure connects institutions, businesses, and individuals worldwide, offering fast, low-cost transactions. The network distinguishes itself through its ability to process exchanges between different currencies, both traditional and digital.
XLM (or Lumen) is the native cryptocurrency of the Stellar network. It serves both as a payment method for transaction fees and as a bridge between different exchanged currencies. Each transaction requires a tiny amount of XLM (0.00001 lumens), preventing attacks while maintaining minimal costs.
The Stellar Development Foundation (SDF), a non-profit organization, oversees the protocol’s development. Unlike other cryptocurrencies, Stellar wasn’t designed as a speculative investment but as a practical financial tool solving real problems in international payments and financial inclusion.
The story of Stellar begins in 2014, when Jed McCaleb, founder of Mt. Gox and co-founder of Ripple, partnered with Joyce Kim to create a new blockchain. This initiative stemmed from a divergence of vision with Ripple, which McCaleb had left due to disagreements about the project’s direction.
Initially, the Stellar protocol was based on Ripple’s. However, while Ripple targets financial institutions for significant transactions, Stellar focuses on individuals and micro-payments, with a more inclusive vision.
In 2015, the token’s name changed from “Stellar” to “Lumen” (XLM) to distinguish the network from the Stellar.org organization (now the SDF).
A major turning point came in 2017 with the announcement of a strategic partnership with IBM. This collaboration enabled the development of cross-border payment solutions using the Stellar blockchain, giving the project considerable legitimacy.
In November 2019, the SDF made a radical decision by burning more than half of the total XLM supply, reducing it from 105 billion to 50 billion tokens to make the ecosystem more efficient.
Jed McCaleb is the central figure behind Stellar. A visionary entrepreneur, his career is marked by noteworthy projects in the crypto universe. Before Stellar, McCaleb had founded Mt. Gox in 2010 and co-founded Ripple Labs in 2011. Where Ripple focused on large financial institutions, McCaleb envisioned a more inclusive and accessible approach.
With this vision, he partnered with Joyce Kim, a former venture capital attorney, to found Stellar in July 2014 and create the Stellar Development Foundation (SDF), a non-profit organization dedicated to network development.
McCaleb’s vision for Stellar is distinguished by its emphasis on global financial inclusion. He believes blockchain can help solve real problems for the unbanked, particularly in developing countries.
Today, although McCaleb has reduced his direct involvement in day-to-day operations, his vision continues to influence the project’s strategic direction.
XLM plays several fundamental roles in the Stellar ecosystem. Its primary function is to serve as a bridge currency in multi-currency transactions : When a user wants to convert one currency to another, the network can use XLM as an intermediary, enabling smooth automatic conversion between different currencies.
Each transaction on the network requires minimal fees of 0.00001 XLM. These fees, negligible for the user, play a crucial role in preventing denial of service attacks (DDoS). The protocol also requires each account to maintain a minimum balance of 0.5 XLM. This “base reserve” prevents the proliferation of inactive accounts and contributes to network health.
XLM also serves as a medium of exchange and store of value within the ecosystem. The Stellar Development Foundation uses its reserves to fund protocol development and support adoption initiatives.
Finally, XLM plays a role in governance of the network, allowing holders to participate in community discussions and indirectly influence protocol evolution.
The Stellar network is built on a unique blockchain technology, designed to be fast, economical, and accessible.
At the heart of the network is the Stellar Consensus Protocol (SCP), developed by Stanford professor David Mazières. Unlike proof of work (PoW) or proof of stake (PoS) mechanisms, SCP uses a model called “Federated Byzantine Agreement” (FBA).
In this model, each node selects a set of trusted nodes, forming a “quorum slice”. Consensus is reached when enough nodes agree on the validity of a transaction. This method allows transactions to be validated in just 3 to 5 seconds on average.
The network consists of numerous servers distributed globally, each maintaining a copy of the distributed ledger that records all transactions. Stellar can process up to 1000 transactions per second, placing it among the most performant blockchains.
A distinctive feature is its native decentralized exchange (DEX), allowing users to create buy and sell offers for different asset pairs without a centralized intermediary.
“Anchors,” typically financial institutions, serve as gateways between Stellar and the traditional financial system, issuing digital representations of fiat currencies on the network.
Finally, to ensure security, Stellar implements several protection mechanisms, such as minimal transaction fees, asset freezing, and trust limits allowing users to specify which issuers they accept.
Let’s now look at the strengths and areas for improvement of Stellar.
Stellar (XLM) has experienced a price evolution characteristic of established cryptocurrencies, with periods of high volatility but also certain resilience.
At its launch in 2014, XLM was worth a fraction of a cent. The cryptocurrency remained discreet until the 2017-2018 bull run, reaching its all-time high at nearly $0.93 in January 2018, coinciding with the announcement of the IBM partnership.
Like most cryptocurrencies, XLM underwent a severe correction during the “crypto winter” of 2018-2019, losing more than 90% of its value. The bull market of 2020-2021 offered a new growth opportunity, with a new peak at about $0.80 in May 2021.
Late 2024, it saw an incredible rise of over 500% in just 3 weeks, reaching $0.63. Today in 2025, its market capitalization fluctuates around $9 billion and places it in the top 20 largest cryptocurrencies.
For short and medium-term horizons, XLM could reach a range of $1.20 to $2.50 by 2026, depending on the adoption of cross-border payment solutions and integration with traditional financial systems.
By 2030, the token could trade between $5 and $15 if Stellar manages to establish itself as a major infrastructure for international payments and central bank digital currencies, with significant adoption in emerging markets.
For the very long term, 2050 projections are naturally more speculative, but in an optimistic scenario where Stellar becomes a pillar of global financial infrastructure, XLM could reach $30 to $50.
These estimates are very optimistic and heavily dependent on the long-term success of the project, regulatory evolution, and its ability to adapt to future technological innovations. They involve a high degree of uncertainty and do not constitute investment advice. As always, we encourage you to do your own research and analysis.
Let’s now look at all the moments that have shaped Stellar’s journey.
July 2014 : Creation of Stellar by Jed McCaleb and Joyce Kim after McCaleb’s departure from Ripple.
August 2014 : Initial distribution with a supply of 100 billion tokens.
January 2015 : Adoption of the Stellar Consensus Protocol (SCP), improving network security and efficiency.
September 2015 : Token name change from “Stellar” to “Lumen” (XLM).
October 2015 : Stripe invests $3 million in Stellar, bringing significant legitimacy to the project.
May 2017 : Announcement of partnership with IBM to develop a cross-border payment solution.
October 2017 : Launch of the Stellar Decentralized Exchange.
January 2018 : All-time high price of approximately $0.93.
November 2019 : Reduction of XLM supply from 105 to 50 billion tokens.
October 2020 : Integration of the USDC stablecoin on the Stellar network.
January 2021 : Signing of a memorandum of understanding with Ukraine to develop infrastructure for a central bank digital currency.
October 2021 : Announcement of partnership with MoneyGram to facilitate conversion between stablecoins and fiat currency.
June 2022 : Launch of Stellar Turrets enabling smart contract execution.
April 2023 : Deployment of the Soroban protocol, Stellar’s smart contract platform.
November 2024 : Latest price peak, around $0.63.
Acquiring XLM tokens is a necessary step for those who wish to invest in the project, participate in its governance, or use the applications in its ecosystem. Due to its growing market capitalization and popularity, the XLM token is available on most centralized exchange platforms (CEX).
These platforms allow you to buy Stellar directly with euros or dollars via different payment methods (bank card, wire transfer). Here is our ranking of the best platforms in 2025 :
It’s important to distinguish between specialized platforms (like those mentioned above) where you actually buy and own cryptocurrencies, and brokers that sometimes offer derivative products (notably CFDs) on cryptocurrencies. For direct ownership and complete control of your assets, we recommend a specialized exchange platform.
Here’s how to buy Stellar in 5 steps on the best platform in our ranking.
Choose a platform that meets your needs in terms of fees, security, ease of use, and regulatory compliance in your jurisdiction.
Once you’ve acquired XLM tokens, the question of their secure storage becomes paramount. Leaving your cryptocurrencies on an exchange platform (CEX) carries significant risks : you don’t directly control your private keys, and your funds could be lost in case of platform hacking, regulatory issues, or company bankruptcy.
That’s why it’s strongly recommended to transfer your XLM to a personal wallet where you alone hold the private keys. “Not your keys, not your coins“.
There are mainly two types of wallets for storing your XLM :
The choice between a cold wallet and a hot wallet depends on your specific needs : prioritize a cold wallet (like Ledger) for maximum security of your main investments, and possibly use a hot wallet (like MetaMask or Trust Wallet) for smaller amounts intended for regular interactions with Stellar’s DeFi ecosystem or others. The essential thing is to always carefully secure your recovery phrase (seed phrase) and never share it or store it digitally.
Obtaining Stellar Lumens (XLM) for free is possible through various methods, although opportunities have become more limited as the project has matured.
Reward programs like Coinbase Earn allow you to earn XLM by watching educational videos and answering quizzes. Airdrops, although less frequent today, have also been used by the SDF to promote network adoption.
Participation in development programs can also be a way to obtain XLM, as the SDF actively supports developers who contribute to the ecosystem. Finally, blockchain-based games and applications on Stellar sometimes incorporate reward mechanisms in XLM.
Beware of scams. Always verify sources, especially for announcements and giveaways promising free distributions of XLM.
The legality of Stellar (XLM) varies considerably across jurisdictions. In the majority of developed countries, XLM is perfectly legal to buy, hold, and exchange. The United States, Canada, the European Union, the United Kingdom, and Australia allow its use under certain regulatory conditions.
In the United States, XLM has not been classified as a security by the SEC, which constitutes a significant regulatory advantage. Conversely, some countries like China, Bolivia, Egypt, and Morocco have imposed significant restrictions on cryptocurrency use.
Finally, tax aspects, reporting obligations, and anti-money laundering rules vary considerably from country to country, even where XLM is legal. In France, for example, there is a 30% flat tax on all capital gains related to digital assets.
The largest holder of XLM is the Stellar Development Foundation (SDF), which controls approximately 30 billion XLM, or nearly 60% of the total supply of 50 billion.
This reserve is allocated according to a transparent plan :
Next, centralized exchanges like Binance, Bitget, Bybit, and institutional investors like Grayscale collectively hold several billion XLM.
Finally, individual users and small investors represent a growing share of the distribution, but with significantly less power… This is why the relatively high concentration of XLM in the hands of the SDF sometimes raises criticisms regarding the actual level of decentralization of the network.
In 2025, Stellar (XLM) stands out for its proven technology and mission of financial inclusion. After more than ten years of existence, the network has demonstrated its reliability with millions of processed transactions, while its strategic partnerships with IBM and MoneyGram attest to its credibility.
Despite its strengths, Stellar faces intense competition in the blockchain payments sector and challenges like the relative centralization of the network. The significant concentration of XLM in the hands of the Stellar Development Foundation raises legitimate questions, even though this structure allows for coordinated development.
Our opinion is cautiously optimistic for the future of Stellar. Recent technical evolution, particularly with the introduction of the Soroban platform, opens perspectives beyond simple payments, while its social mission continues to resonate in a crypto ecosystem often dominated by speculation.
Stellar is a decentralized blockchain platform designed to enable fast and low-cost international money transfers. XLM (Lumen) is its native cryptocurrency, used as a bridge currency between different fiat currencies and to pay the network’s minimal transaction fees.
Stellar uses the Stellar Consensus Protocol (SCP), a consensus mechanism based on the Federated Byzantine Agreement model. This system allows transactions to be confirmed in 3–5 seconds without the high energy costs of mining, relying instead on a network of interconnected trusted nodes.
While both Stellar and Ripple were co-founded by Jed McCaleb and aim to streamline cross-border payments, their target audiences differ. Stellar focuses more on individuals and financial inclusion, whereas Ripple targets large financial institutions and banks for high-value transfers.
XLM can be purchased on major exchanges like Binance, Coinbase, or Kraken. For storage, options include hardware wallets (Ledger, Trezor), mobile apps (Solar Wallet, Lobstr), and online solutions like the official Stellar Account Viewer.
Stellar’s future looks promising thanks to its proven technology, strategic partnerships, and the expansion of its capabilities through the Soroban smart contracts platform. Its mission to promote financial inclusion and ability to integrate with traditional finance could position it as a key global payment infrastructure.
DISCLAIMER
This article is for informational purposes only and should not be considered as investment advice. Trading cryptocurrencies involves risks, and it is important not to invest more than you can afford to lose.
InvestX is not responsible for the quality of the products or services presented on this page and cannot be held liable, directly or indirectly, for any damage or loss caused by the use of any product or service featured in this article. Investments in crypto assets are inherently risky; readers should conduct their own research before taking any action and invest only within their financial means. This article does not constitute investment advice.
Risk Warning : Trading financial instruments and/or cryptocurrencies carries a high level of risk, including the possibility of losing all or part of your investment. It may not be suitable for all investors. Cryptocurrency prices are highly volatile and can be influenced by external factors such as financial, regulatory, or political events. Margin trading increases financial risks.
CFDs (Contracts for Difference) are complex instruments with a high risk of rapid capital loss due to leverage. Between 74% and 89% of retail investor accounts lose money when trading CFDs. You should assess whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Before engaging in financial or cryptocurrency trading, you must be fully informed about the associated risks and fees, carefully evaluate your investment objectives, level of experience, and risk tolerance, and seek professional advice if needed. InvestX.fr and the InvestX application may provide general market commentary, which does not constitute investment advice and should not be interpreted as such. Please consult an independent financial advisor for any investment-related questions. InvestX.fr disclaims any liability for errors, misinvestments, inaccuracies, or omissions and does not guarantee the accuracy or completeness of the information, texts, graphics, links, or other materials provided.
Some of the partners featured on this site may not be regulated in your country. It is your responsibility to verify the compliance of these services with local regulations before using them.
