Stellar for Exchanges
The digital asset economy is growing faster every day, and exchanges are a foundational part of this growth. Exchanges act as important on/off ramps for users participating in digital ecosystems around the world.
Many exchanges require users to verify their identity and link to a bank account in order to access these on/off ramps. But what happens to people located in geographies with limited access to banking services?
- Approximately 2 billion people remain unbanked across the globe according to Acuant.
- Women in developing countries remain 9% less likely than men to have a bank account.
- According to an October 2020 report from the FDIC Survey of Household Use of Banking and Financial Services, 5.4% of American households are unbanked (or approximately 7.1 million households).
- According to Statista, these were the top six countries whose population don’t have access to the services of banks or similar institutions worldwide in 2021:
- Morocco (71%)
- Vietnam (69%)
- Egypt (67%)
- Philippines (66%)
- Mexico (63%)
- Nigeria (60%)
“A 2017 Federal Deposit Insurance Corporation survey found that roughly 14 million American adults lack a bank account—a figure that has become all the more important during the COVID-19 pandemic.”
– Chris Giancarlo, former Chairman of the U.S. Commodity Futures Trading Commission.
Stellar helps exchanges enable compliant on/off ramps -- including cash-in and cash-out points -- that grant the exchanges access to local currencies in these under-represented geographies, including those without bank accounts.
A global blockchain network, Stellar allows both traditional and digital financial institutions to interoperate within the same infrastructure. This is accomplished through anchors – native interoperable on/off-ramps within the Stellar network. Anchors support standardized services for converting Stellar-based assets into local currency, and vice versa.
Simply put, the interoperability of Stellar opens access to new markets, users, and services around the world. Exchanges looking to tap into these emerging markets can integrate assets like Stellar USDC to unlock cheaper, day-to-day payments.
Interoperability as a service
Financial institutions and financial technology companies worldwide issue assets and settle payments on the Stellar network, which has grown to over 5 million accounts and has processed more than 1.5 billion total operations.
USDC is the world’s leading fully reserved digital dollar currency, issued by Circle and governed by Centre. With Stellar USDC, users have access to a digital dollar that was specifically built for payments, enabling seamless, instant, low-cost cross-border transactions and next-gen treasury management. It has seen over 1,000% year-over-year growth and now has nearly $6B USDC in circulation with the Stellar network.
By integrating Stellar-based assets like Stellar USDC, your exchange can provide multi-chain interoperability and take advantage of Stellar’s low fees and fast confirmation times to provide users with faster, more cost-effective USDC transfers and withdrawals. This is a stark contrast when you compare Stellar to:
SWIFT:
Transactions can take up to 1-4 working days, with fees determined by the bank that initiates your transfer and typically ~3-5% in exchange costs.
Other Blockchains:
Transaction costs depend largely on blockchain fees, like Ethereum’s gas fees, but using Stellar USDC can save users anywhere between $12 and $34 on typical transactions when compared to other networks affected by pricing surges.
Exchanges provide access to Stellar assets
Stellar offers exchanges exciting opportunities in new geographies. Not only is Stellar fast and inexpensive to use for both institutional and retail users, it also gives exchanges access to Stellar's existing global network of anchors. Exchanges that integrate and support Stellar-based assets like Stellar USDC, EURT, and BRL gain access to the entire Stellar ecosystem, instantly meeting the needs and demands of their users across these new, emerging economies.
- Allow a user to deposit, withdraw and send their Stellar-stablecoins (e.g., USDC and EURT)
- Enable payments and on/off ramps for retail and institutional users
Anchors & Available Features
Potential benefits of integrating Stellar-based assets into your exchange
- Increase and diversify your user base (retail and institutional)
- Increase trading volume
- Provide instant access for your users to Stellar on/off ramps for their financial needs
- Offer a cheaper and faster alternative for your users
- Bridge to advanced use cases, i.e. cards, yield products, remittances, AMM
- Increased brand visibility through collaboration with Stellar
Integrating Stellar assets is easy. If your exchange already supports Stellar lumens (XLM), a simple few code additions can unlock access to more global currencies and digital assets. If your exchange already supports assets like USDC through other protocols, no new listings are required on your exchange. Additionally, the friendly API tooling supports a short development window for your engineering teams.
If you’d like to get started integrating Stellar assets into your exchange, reach out to our team below.
Start using Stellar
Stellar’s expanding network of anchors, applications, and partner companies is changing how people exchange and send money. Curious how Stellar could help you grow your business? We’d love to talk.