[THE INVESTOR] Open payment platform operator Stellar Development Foundation is hoping to become the industry’s “internet” to help people make payments more easily online, according to its chief technology officer.



“Stellar is a universal payment network,” Stellar co-founder and CTO Jed McCaleb told The Investor in Seoul last week, during SparkLabs Demoday. “Just like how internet has democratized information and allowed easy access to everyone, that’s what we are trying to do. Our open payment platform can be used by anyone in the world and is beneficial to everybody. It doesn’t matter what kind of financial institution or service you use, it will all work seamlessly together.”



Stellar is a US-based nonprofit organization running a blockchain-based payment platform based on a low-cost network that enables direct, cross-border money transfers that are as easy sending e-mails, and without depending on traditional financial institutions and banks.





Stellar CTO Jed McCaleb. SparkLabs





By doing so, Stellar hopes to tackle poverty and inequality especially in developing countries that are deprived of access to financial services.



“While it is easy to send money in countries like Korea and the US, it is still difficult to send money in countries like Nigeria, because 60 percent of the people don’t have bank accounts. The remittance fees are also expensive. I believe our open-source payment platform will help everyone, especially the unbanked population that is left out from the current system.”



The CTO, known for creating eDonkey file-sharing platform and Mt.Gox bitcoin exchange in the past, believes blockchain technology will make the world a bit more fair place. “With money and payments, there are a lot of gatekeepers to go through. And if we can get rid of them to make an even playing filed, everyone will be better off and there will be more freedom.”



McCaleb emphasized that Stellar is not competing with current payment players, such as Venmo or PayPal in the US, and Kakao Pay in Korea. “We are like a common protocol between payment networks and financial institutions,” he said. “It doesn’t compete with existing things, but they can use it to further their reach and scale up.”



This was made possible due to Stellar’s own native cryptocurrency Lumen that is used as a “bridge currency” in the network. It allows transactions between different currencies more efficient and at reduced rates, according to McCaleb. It also used as a security token of the network to prevent malicious users or possible DDos attacks in the network.



Lumen, which surpassed US$2 billion in market capitalization, is available in Korea as well through two exchanges -- Gopax and Upbit -- with plans to debut on more trading platforms in the future.



Stellar has been accelerating partnership with major tech and finance institution, including IBM most recently. “IBM is bringing a consortium of 30 banks that want to send money across borders easily. They will use Stellar as the payment rail between them.”



The CFO said he is in talks with Korean payment operators to expand partnerships to launch the service here as well.



On the latest cryptocurrency fervor, McCaleb projected the bitcoin bubble will burst sometime in the future. “The price can’t continue to go up and at some point, there needs to be some kind of correction,” he said.



In the meantime, he called on people to get into the cryptocurrency trading with knowledge and understanding of the underlying technology, and not be fooled by the marketing materials.



“You should be buying the cryptocurrency with knowledge that it is speculative,” he said. “The cryptocurrency is really technical, and in order to be able to analyze it, you have to spend a lot of time and really know the technical aspects. Having a background in computer science helps. You can’t just read the marketing material. They promise a lot of stuff but some of the things just don’t make sense.”



By Ahn Sung-mi (sahn@heraldcorp.com)