Recently, IBM launched the blockchain world wire, and has letters of intent from over 50 banks. While this is interesting, the expectation is that most of these banks and other institutions will use stable coins to settle, even when using the stellar blockchain. While this may be the case in the short-term, chances are that as volumes increase, institutions using the IBM blockchain world wire will choose to settle in Stellar (XLM) for a number of reasons.
For starters, Stellar (XLM) is less of a risk. That’s because when an institution chooses to settle in anchor cryptos, it is choosing to trust that those anchors are pegged 1:1 to the dollar or any other fiat currency. In reality, this does not always happen, and if that happens at scale, it can lead to a huge systemic risk to the institutions using those anchors for settlements. The safest approach would be to use stellar (XLM). By using Stellar for settlements, a bank would be bypassing all these risks. That’s because, this is a blockchain that is well-known and transactions don’t need any trusted parties for them to go through.
The only reason that banks may not use Stellar (XLM) at this point is its lack of price stability. This is a problem that is hindering the adoption of the entire crypto market, including Bitcoin (BTC). Until prices can be stable enough to allow for predictability in transactions, adoption will be slow, and it’s mostly stable coins that will be used. But this will change over time, as volumes increase.
The more volumes rise, the more it will be impossible for random pump and dumps to happen. One of the factors that will drive up these volumes is the uptake of crypto by institutional money. Platforms like Bakkt will play a significant role in driving up these volumes. More exchanges listing cryptos will drive up these volumes too, and help stabilize the whole market. Once this stability becomes clear to the market, banks using the stellar blockchain will ultimately shift to Stellar for its safety.
In essence, Stellar (XLM) investors are likely to be rewarded long-term as the IBM Blockchain World Wire takes shape. The moment banks start settling transactions in Stellar (XLM), its value could rise significantly. Besides, Stellar (XLM) has a number of other uses that could see its value grow over time. For instance, Stellar is taking shape as the blockchain that could lead the way in the issuance of security tokens. Already, security token exchanges are coming up, an indicator that security tokens could be about to explode. This could push Stellar to the stratosphere.
This makes stellar one of the best crypto investments going forward. The possibility of Stellar (XLM) pushing to a $1 or more in a few years is possible. All it takes is patience, and a focus on the bigger picture. The entire crypto space is showing signs of positive growth, and most of the top cryptos are guaranteed of growth through adoption.