Stellar Lumens [XLM]: Payments depend really heavily on network effects, says Jed McCaleb

Stellar Lumens [XLM], the eighth largest cryptocurrency by market cap, and Stellar.org, has made headlines over the past couple of days.

Additionally, the cryptocurrency is going to be used for cross-border, near-instant transactions as part of the IBM Blockchain World Wire. The payments solution is going to be used in more than 50 countries, with the support of the Stellar protocol.

Jed McCaleb, the CTO of Stellar.org and Jesse Lund, the Head of Blockchain and Digital Currencies at IBM, spoke about cryptocurrency enabling financial inclusion, during the Money 20/20 conference. They also spoke about the progress cryptocurrencies have made in the payments sector.

Jesse Lund spoke about how this new step would have a positive impact in terms of financial inclusion, and how it would help banks and money transmitters make faster and cheaper transactions. Lund stated that digital currencies would definitely have a positive impact on financial inclusion, adding that it is one of their focus areas.

He further stated that there are around 2 billion adults across the globe, with no access to financial services or bank accounts. However, over a billion have access to smartphones capable of storing digital value, he added. Jesse Lund said,

“That’s the whole point. I mean we can actually bring money further and farther than it could ever go before even if there’s not you know a tangible banking presence in some of these emerging economies.”

He further stated that this factor is the reason for the growth of the payments industry. He added,

“It’s not just taking revenue or market share away from somebody else some of the incumbents. There’s actually new business being born because there’s 2 billion people in the world that can now be part of this global financial economy”

This was followed by Jed McCaleb speaking about the progress of cryptocurrency adoption in the payments industry. McCaleb stated that several people in the cryptocurrency space “underestimated” the time it would take for cryptocurrency adoption in payments, adding that he has been working in this sector for over eight years now.

“[…] the reason why is that payments depends really heavily on network effects and that’s just not there yet and and the only way that it can kind of be achieved is by bringing like a consortium like a whole group of people together that are willing to adopt one common thing at the same time and that’s exactly what World Wire is doing or so I think”

This was followed by McCaleb stating that even though there has not been much progress, there is a lot of interest for such an endeavour.

“So being able to bring them all at once we should see like the snowballing effect and things really got get rolling now so I’m not that interested in the last six months but the next six months in the next year is things where things are going to really start to heat up”

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