UK-based crypto startup Wirex Ltd. has partnered with
Stellar to launch 26 fiat-backed stablecoins to be integrated onto the Wirex
platform. The company has also announced the support of Stellar’s native asset Lumens
(XLM), which will be joining 19 other crypto and conventional currencies supported
by the Wirex Visa card, Wirex said on Thursday.
Wirex, which claims two million+ users, 5,000+ business clients
and more than US$2 billion worth of transactions processed since inception, is
a payment and crypto startup regulated by the UK Financial Conduct Authority (FCA).
The company offers consumers and businesses accounts for domestic and
international payments as well as a Visa card that allows users to convert and
spend cryptocurrencies wherever Visa is accepted.
The stablecoins will be built on Stellar, which in addition
to greater security and scalability, allows for real-time transactions at a
fraction of the cost of other blockchain networks, Wirex said. The stablecoins
will be pegged to a wide variety of fiat currencies including USD, EUR, GBP,
HKD and SGD, with possible use cases for retail and business clients that
include international remittance, payment, instant token issuance and
redemption, cryptocurrency hedging and instant merchant settlements. Users will
also be able to convert stablecoins instantly to other stablecoins at
over-the-counter (OTC) rates.
“Stablecoins have the potential to transform the payments
space,” Jed McCaleb, co-founder of Stellar, said in a statement. “We’re excited to be working with Wirex to
launch its first stablecoins to help make money more fluid and open to
everyone.”
Stablecoins are digital currencies aim to mimic traditional,
stable currencies. In general, a stablecoin is a cryptocurrency that is
collateralized to the value of an underlying asset. Many of them are pegged at
a 1:1 ration with certain fiat currencies, while others can be pegged to other
kinds of assets such as precious metals like gold, or even to other
cryptocurrencies.
Stablecoins have been all
the rage since 2018. According to a report
by crypto company Blockchain, there were 57 active stablecoins as of the end of
2018 and their total
market value was estimated at US$3 billion. Popular ones include Paxos
Standard, Stasis, Reserve, USD Coin and Gemini Dollar.
“Stablecoins combine the speed and cost of cryptocurrency
transfers with the market stability of fiat currency,” Pavel Mateev, co-founder
of Wirex Ltd., told
Forbes.
“Traditional banking remittance can be expensive and time consuming and does not reflect the constant live economy that consumers have come to expect. […] Stablecoins are a cost-effective and efficient way to move funds across the globe and we expect a large volume of retail customers to use stablecoins for sending money to their friends and families around the world.”