Stellar Makes Big Gains On Banking Settlement News: Analysis

Stellar makes big gains on the multiple banking settlement news that emerged a few days ago, most recently being the one of Ukraine choosing the cryptocurrency to run its upcoming central bank digital currency. The price of XLM soared to $0.39 as it moved back in the top ten, making a 31 month high as we can see in today’s Stellar news.

Over the week, there was plenty of positive news regarding Stellar like the one from the Ukrainian Central bank announced that it chose Stellar to run its upcoming central bank digital currency. Denelle Dixon, the CEO Stellar’s Development Foundation said:

 “We look forward to working with the Ministry and other stakeholders to digitize the hryvnia, to bring Stellar-based tools and services to the people and businesses of Ukraine, and to introduce new partnership opportunities in Ukraine to businesses in the Stellar ecosystem.”

As important as that is, maybe an even bigger thing for Stellar lies ahead with the potential involvement of the US banking settlement infrastructure. At the start of the week, Circle CEO Jeremy Allaire tweeted that the US treasury gave the green light for the US banks to use public blockchains as a settlement layer:

 “The new interpretive letter establishes that banks can treat public chains as infrastructure similar to SWIFT, ACH and FedWire, and stablecoins like USDC as electronic stored value. The significance of this can’t be understated.“

He said that this is a major victory for the cryptocurrency especially for the USDC stablecoin but what’s even more important is that this paves the way for mainstream adoption. USDC started as an ETH-based token founded in a collaboration with Circle and Coinbase but last year saw it move to Algorand’s blockchain as well as to Stellar’s. the limitation of the ETH blockchain spurred this chance. The US Treasury’s mention of public blockchains could refer to the few approved blockchains and similar to this, dollar stablecoins could also mean any number of dollar stablecoin offerings. Whether this plays out or not, remains to be seen.

1/ Breaking major news from US Treasury OCC, the largest US banking regulator (@USOCC), with new guidance allowing US banks to use public blockchains and dollar stablecoins as a settlement infrastructure in the US financial system. https://t.co/gQFWISWUnc

— Jeremy Allaire (@jerallaire) January 4, 2021

Back in December,  one of Germany’s oldest banks said that it chose Stellar to issue a Euro-backed stablecoin and according to the official announcement, Bankhaus von der Heydt said that it will launch the EURB on the Stellar Network for sure. The development is a result of the partnership between the bank and a German startup- Bitbond. Stellar makes big gains on news like these ones so let’s see how it will behave in the days ahead.