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The Stellar token saw a significant 11.5% rise in value from Sept. 2 to Sept. 8, a noteworthy occurrence as Bitcoin and the majority of altcoins declined during the same period. This increase followed Stellar (XLM) testing the $0.113 support level, which represented its lowest point in the last eight weeks. The price rise was prompted by an initial announcement from the Stellar organization shared on social media.
While the announcement was somewhat vague, it suggested that something important is set to happen on Sept. 12, using phrases such as “something cool is dropping” and “change” on the horizon.
XLM price in USD at Bitfinex, 12-hour time frame. Source: TradingView
On Sept. 7, Stellar further raised expectations by hinting at a possible partnership. However, similar to the previous announcement, no specific details were disclosed, with only terms like “brand” and “real world” mentioned, indicating a potential rebranding and a focus on real-world assets (RWA) such as stocks, bonds, and real estate.
Caroline Pham, one of the five commissioners of the Commodity Futures Trading Commission, highlighted on July 17 that recent court rulings regarding the classification of cryptocurrency assets would ultimately lead to clearer regulations. Pham also emphasized the importance of RWAs and pointed out the opportunities for modernizing financial markets through the tokenization of money market funds utilizing blockchain technology.
No, it’s not likely that Elon Musk is coming to save XLM
Unfounded speculation emerged regarding Elon Musk’s X (formerly Twitter) potentially incorporating XLM after the social media platform secured a currency transmitter license from regulators on Aug. 28. It is noteworthy that X had previously received approvals from six other states prior to this latest announcement.
Elon Musk will build X into the worlds most valuable financial institution
He is acquiring all the necessary licenses to integrate CRYPTO into Twitter/X
My hope is that $ETH, $XRP or $HBAR or even $XLM is one day involved pic.twitter.com/YjRTxF0pMz— MASON VERSLUIS (@MasonVersluis) August 31, 2023
Furthermore, it is crucial to recognize that even if X opts to integrate various cryptocurrencies, XLM’s current market capitalization of $3.4 billion does not position it among the top 20 contenders. A similar evaluation, based on Messari Crypto’s “real volume” ranking, places XLM at 20th in terms of trading volume, lagging behind competitors such as Bitcoin Cash (BCH), Sui (SUI), Litecoin (LTC), and Ripple’s XRP (XRP).
In mid-August, the Stellar Development Foundation (SDF) utilized its cash reserves to become a minority investor in payments provider MoneyGram International. SDF, the organization responsible for the development of Stellar’s native token, had previously formed a commercial partnership with MoneyGram in 2021.
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According to Denelle Dixon, SDF’s CEO and executive director, this investment aims to assist MoneyGram in expanding its digital operations and exploring blockchain technology.
Stellar’s website states:
“Your application can now seamlessly connect to MoneyGram’s retail network through a single integration, allowing users to deposit or withdraw cash from their digital wallets via Stellar USDC without requiring a bank account.”
The website further outlines the integration’s various advantages, including enabling users to “top up their digital wallet balance with cash,” conduct “near-instant, low-cost cash transactions” using “dollar digital currencies,” and complete Know Your Customer procedures “through MoneyGram’s user-friendly interface.”
Related: Ripple acquires Fortress Trust, expands license portfolio in the US
Stellar’s announcement will likely involve Soroban
Stellar is gearing up to launch a smart contract platform named Soroban on its mainnet. The company initiated a $100 million adoption fund in October 2022 to stimulate developer engagement for applications on its Futurenet testnet.
Although the recent price movements are intriguing, aside from the baseless speculation, all indications suggest that Stellar is positioning itself to compete in the $37.8 billion decentralized application market. The current market leader, Ethereum, commands a substantial 56.6% market share, according to DefiLlama, despite its average transaction fee of $4.
It is clear that RWAs in decentralized finance present considerable potential, as demonstrated by MakerDAO’s holdings of U.S. Treasurys, which have enhanced the protocol’s revenues and effectively reduced the increased exposure of its Dai (DAI) stablecoin to USD Coin (USDC).
XLM investors will continue to anticipate the Sept. 12 announcement, but until definitive information arises regarding what this payment network may unlock, the chances of achieving further gains of 12% or more to exceed the $0.14 price last observed on Aug. 10 appear limited.
This article is for informational purposes only and is not intended to be and should not be construed as legal or investment advice. The views, thoughts, and opinions expressed herein are solely those of the author and do not necessarily reflect or represent the views and opinions of Cointelegraph.
