I see a lot about helping the underbanked, but in practice, how will stellar actually benefit the underbanked?


Straight from https://www.stellar.org/about/mandate/ I added the actions Stellar has taken in parentheses.


To promote global financial access, literacy, and inclusion, SDF shall:

  • Develop and maintain a secure and low cost global transaction network “Stellar Network” and protocol “Stellar Protocol” that is high quality, open-source, and publicly accessible to everyone. (they reduced the wallet minimum balance from 20 to 1)

  • Develop and maintain publicly accessible tools and services to support the Stellar Network and its users. (using JavaScript SDK and easy to learn code while running the Stellar Laboratory)

  • Provide guidance and direction for the Stellar ecosystem.

  • Promote adoption of Stellar as a worldwide payment standard. (partner with IBM and made a ATM for XLM)

  • Distribute the native currency of the Stellar ecosystem, lumens, to the world to expand the reach of the network and create a more inclusive digital economy. (Stellar has a direct signup program)

  • Create and support technical and non-technical partnerships and educational initiatives to boost digital financial literacy and development efforts at the institutional and community level.


From my understanding it's similar to the claim Bitcoin makes, removing the current barriers to banking, where people would/could not have a bank account but they may have a mobile phone allowing them access to a mobile money account.

  • It allows you to have an account without needing valid ID or documentation like birth certs.
  • Lower transaction fees & faster transfer times.
  • The last point is especially useful for remittance, sending money from one county to a home country to help family.
  • Where physical bank access itself can be difficult.

Andreas Antonopolous has spoken quite a bit on how Bitcoin can help the unbanked and I would say most is applicable to Stellar. Andreas Antonopoulos What Bitcoin Means For Unbanked Economies.

To solve these problems, we need financial infrastructure that supports the kind of organic growth and innovation we’ve seen from the Internet, yet still ensures the integrity of financial transactions. Historically, we have relied on high barriers to entry to ensure integrity. We trust established financial institutions and do our best to regulate them. But this exclusivity conflicts with the goal of organic growth. Growth demands new, innovative participants, who may possess only modest financial and computing resources. We need a worldwide financial network open to anyone, so that new organizations can join and extend financial access to unserved communities. The challenge for such a network is ensuring participants record transactions correctly. With a low barrier to entry, users won’t trust providers to police themselves. With worldwide reach, providers won’t all trust a single entity to operate the network. A compelling alternative is a decentralized system in which participants together ensure integrity by agreeing on the validity of one another’s transactions. Such agreement hinges on a mechanism for worldwide consensus. The Stellar Consensus Protocol


In addition to the benefits that bitcoin/other cryptocurrencies provide, stellar also allows underbanked people to forget currency altogether. For example, if someone has credits for cows, stellar can find a path through "anchors" that can allow them to instantly exchange a cow credit for an equivalent amount of seed credits.

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