Stella is a blockchain network designed to move funds across borders faster and cheaper than traditional banks. Instead of routing payments through correspondent banks or clearinghouses, Stellar uses a native token called a distributed ledger. $XLMand a network of licensed financial intermediaries called Anchors that settle cross-border transactions in seconds.
What problems does Stellar actually solve?
Sending money internationally through traditional banking systems is time-consuming and expensive. Wire transfers take 3-5 business days and are subject to a $25-$50 fee. Additional charges are included in the exchange rate increase. When people in developing countries send money home, the costs can be significant.
Stellar was built to replace that process. The network settles transactions in 3-5 seconds and charges less than a cent per transaction. No bank account is required on either side.
How Stellar Network works
Stellar runs on a distributed ledger. This means that thousands of computers around the world maintain copies of the same transaction records. No single bank or government controls it.
At the heart of the network is the Stellar Consensus Protocol (SCP). Unlike Bitcoin, which uses energy-intensive mining to verify transactions, SCP uses a system called Federated Byzantine Agreements. Nodes on the network agree on the validity of transactions by consulting a set of other trusted nodes, reaching consensus quickly without consuming large amounts of power.
Every transaction on Stellar involves a small amount of $XLMthe network’s native token. $XLM It serves two purposes. One is to act as a bridge currency when there is no direct trading pair between two assets, and the other is to prevent spam by imposing a small cost on each transaction.
Since February 2024, Stellar also supports full smart contracts through Soroban, a Rust-based smart contract platform built on WebAssembly. This enables developers to build programmable financial applications such as: stable coin Enabling mechanisms, automated liquidity, and compliance hooks directly on the network.
What is an anchor? Why is it important?
Anchor is the bridge between Stellar and the traditional financial system. These are licensed financial institutions, such as banks, payment processors, and money transmitters, that prepare real-world currency and issue digital tokens representing that currency on the Stellar network.
For example, a Mexican anchor might hold Mexican pesos in a regulated bank account and issue peso-pegged tokens on Stellar. Users deposit pesos with Anchor and receive equivalent tokens on the network. These tokens can be instantly sent to anyone else on Stellar and redeemed for local currency through the receiving anchor.
This is how payments move from, say, the US to the Philippines without going through a correspondent bank.
- Senders deposit dollars with US-based Anchor, who issues dollar tokens in Stellar.
- The dollar tokens will be sent to the recipient’s wallet in the Philippines in seconds via the Stellar network.
- Recipients will redeem their tokens through Anchor in the Philippines and receive pesos in their local bank account or mobile wallet.
The entire process takes less than a minute. A traditional wire transfer covering the same route would take several days.
How does Stellar handle currency conversion?
Stellar includes a decentralized exchange that allows assets to be exchanged directly on the network. If a direct trading pair does not exist between two currencies, Stellar’s pathfinding algorithm automatically finds the most efficient conversion route, possibly using the following methods: $XLM as an intermediate step.
This is important because not all currency pairs have abundant liquidity. Stellar’s pathfinding means that a sender in Nigeria can pay someone in Vietnam even if there is no direct Naira-to-Don market on the network. The protocol finds the path, performs the swap, and resolves the transaction in one operation.
Real Use: Who is actually using Stellar?
Stellar goes beyond theory. The most obvious examples of networks operating at scale include humanitarian aid, stablecoin payments, and consumer remittances.
UNHCR and the International Rescue Committee used Stellar’s aid platform to distribute cash to people displaced and affected by the war in Ukraine. The program used digital wallets on the Stellar network to deliver funds directly to people without access to banks.
MoneyGram has built one of the most important integrations on the network. The partnership, which began in 2021, is steadily expanding. In April 2026, MoneyGram and Stellar Development Foundation announced a multi-year extension of their collaboration, now focused on stablecoin-powered remittances across Latin America, with the service already available in Colombia and El Salvador. The partnership will give Stellar access to MoneyGram’s network of approximately 500,000 retail locations across more than 200 countries.
On June 2, 2026, MoneyGram went further and launched its own USD-backed stablecoin, MGUSD, natively on the Stellar blockchain. The token is embedded in the MoneyGram app, allowing customers to hold dollar balances and transfer funds through the company’s global payments network without needing a bank account.
As of 2026, the Stellar network has processed over 5.1 billion operations across over 10.1 million accounts since its inception.
Is Stellar suitable for businesses and developers?
Stellar’s developer toolkit is easy to follow blockchain standards. Stellar Development Foundation maintains open source SDKs in multiple programming languages. Since the release of Soroban on mainnet in February 2024, developers can also write complete smart contracts compiled into WebAssembly in Rust, opening the door to programmable stablecoin mechanisms, DeFi primitives, and compliance workflows.
Businesses can issue their own tokens on Stellar that represent loyalty points, stablecoins, or tokenized assets. Compliance tools built into the network, such as Stellar Ecosystem Proposals for KYC and AML checks, make it easy for regulated financial institutions to use the network without violating local laws.
The network currently processes millions of transactions per month, with average fees well below 1 cent.
conclusion
Stellar is a functional cross-border payments network that uses a distributed ledger, authorized anchors, Abacus smart contracts, and native bridge currencies to route funds through traditional banking systems. Transactions take seconds and are settled to the nearest penny. The network has processed over 5.1 billion operations across over 10.1 million accounts. UNHCR and IRC are using this for humanitarian assistance in Ukraine. MoneyGram extended its multi-year Stellar partnership in April 2026 and launched its native stablecoin MGUSD on the network in June 2026. Stellar is not a promise of the future. One is already in operation.
- Stellar Development Foundation – Introducing Stellar: How the Network Works
- Stella’s documentation – Stellar Consensus Protocol: Explaining the Federal Byzantine Agreement
- Stellar Development Foundation – Anchor: Connect Stellar to traditional financial systems
- Stellar Development Foundation – How UNHCR distributes cash assistance through Stellar Aid Assist
- Stellar Development Foundation – How IRC distributed cash assistance through Stellar Aid Assist in Ukraine
- PR News Wire – MoneyGram and Stellar expand partnership to expand real-world stablecoin utility globally, April 2026
- PR News Wire – MoneyGram launches Stellar’s native stablecoin MGUSD in June 2026
- circle – USDC on Stellar: native dollar payments on the network
- star developer – Stellar’s Abacus Smart Contract: Developer Overview
