Stellar, a cryptocurrency payments specialist, has entered into a partnership with Polkadot and its sister network Kusama, via the recently constructed Spacewalk bridge built by Pendulum, the winner of the latest Polkadot parachain auction.
The Spacewalk bridge is expected to connect decentralized finance (DeFi) applications with forex markets, especially in developing countries, where Stellar has built a strong presence since its establishment in 2014. With this partnership, Stellar aims to leverage its fiat on-ramps around the world to connect Polkadot’s DeFi ecosystem with different fiat currencies.
While traditional banking rails for cryptocurrencies have mostly been dismantled in the United States, Stellar and other seasoned firms continue to build critical infrastructure in other parts of the world.
The Spacewalk bridge is currently operational on Kusama, Polkadot’s canary network, and the Polkadot version will be available in the next week or two, according to Pendulum’s co-founder and CTO, Torsten Stüber. Pendulum’s goal is to combine traditional finance with DeFi, said Stüber, who is also CTO at SatoshiPay, a crypto micropayments firm with a long history of working on top of Stellar. The focus is on stablecoins or fiat tokens, not necessarily Lumens, Stellar’s native cryptocurrency.
Stüber spoke highly of Stellar’s implementation of stablecoins, on-ramps, and off-ramps in various countries with different fiat currencies. According to him, no other network has tokenized so many different fiat currencies on the platform.
USDC will be the primary stablecoin that flows across the Spacewalk bridge, and it is also the token that Stellar integrated with MoneyGram, which the two firms began rolling out last year. There will be a range of regional currency stablecoins available, according to Tomer Weller, Stellar Development Foundation’s Vice President of Product. This includes tokenized Argentinian pesos and Brazilian reals, as well as a Kenyan shilling, a few other African stablecoins, and a couple of euro-based ones, Weller said.
Weller stated that almost every MoneyGram agent worldwide is an access point to the Stellar network. This means that users can convert their Stellar assets into actual cash in over 300,000 locations around the world, as well as use these locations to convert cash to crypto, primarily stablecoins, in a smaller number of countries. The service will be rolled out to more countries gradually.
Connecting DeFi to Forex Markets
The Spacewalk bridge built by Pendulum is expected to promote the connection between DeFi and forex markets, which would be especially beneficial for developing countries. The DeFi ecosystem’s decentralized nature allows it to reach underbanked and unbanked populations with greater ease, providing them with access to a range of financial products that are typically not available through traditional banks. By connecting these users to forex markets, they will have access to a broader range of financial tools, including stablecoins and fiat tokens, and will be able to transact globally without the need for intermediaries.
The Benefits
The Spacewalk bridge will benefit users by allowing them to off-ramp their Stellar assets to actual cash in more than 300,000 locations around the world. They can also access and on-ramp their cash to crypto, and specifically stablecoins, in a smaller subset of that. Stellar’s partnership with MoneyGram means that every MoneyGram agent in the world is an access point to the Stellar network.
Conclusion
Stellar’s Spacewalk bridge to Polkadot’s ecosystem will allow for the seamless integration of forex markets with DeFi. The partnership with Pendulum and the integration of stablecoins will also make it easier for users to access and use cryptocurrencies in emerging markets where traditional banking infrastructure is lacking. The partnership is a significant step forward in the development of critical infrastructure for cryptocurrency adoption worldwide.
