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.