Saldo App Creator: Working with Regulators Could Support Stellar’s Efforts to Serve “Real People”

Saldo App’s creator, Marco Montes Neri, shares support on Stellar (XLM) and its protocols that can manage regulatory obligations when it comes to winning the global payments race.

  • Recently, multiple major players in the crypto sector collaborated at the Stellar Meridian conference.
  • By cooperating with regulators, Jed McCaleb stated that the Stellar network can be “useful for actual people.”

Saldo, an app that uses stablecoins that are pegged to the peso, has been approved by the Mexican government for use, ensuring that 20,000 migrant workers are able to use the Stellar network to pay their bills from the US. App developer Marco Montes Neri explained that the use of Stellar is compatible with regulatory policies, allowing these options to be combined.

Neri explained,

“Stellar has created a set of protocols and a set of standards to handle all these regulatory options. If you want to touch real people’s money, you really need to play ball with regulators.”

The theme of collaborating with regulators arose during the Stellar Meridian conference. The conference was hosted in Mexico City, and involved about 350 people, many of which are building on Stellar. One of the big themes appeared to be embracing the financial rules, while Facebook’s fast-moving approach wasn’t as appealing.

Jed McCaleb, the developer of the Stellar cryptocurrency, said that,

“making sure Stellar is useful for actual people” was always the goal in mind. That will ultimately always come back to some sort of regulatory situation … we don’t avoid it.”

Presently, McCaleb is the chief technical officer of the Stellar Development Foundation, which is a powerful place to be while the blockchain-based global payment sector is thriving. Though the Stellar token was developed in 2014, McCaleb co-founded Ripple two years prior. Presently, Ripple focuses on cross-border banking transfers, but the introduction of the Libra whitepaper presented some issues for regulators that are still being sorted out.

The advantage that Stellar has in this situation is that it’s already been established in the industry, featuring a built-in compliance layer. With this layer established above the protocol, users can connect with know your customer and anti-money laundering standards. The structure of Stellar makes the platform helpful for Neri’s business, serving it in a way that Ethereum can’t.

Neri explained,

“In other ledgers, that layer doesn’t exist yet because it hasn’t been the focus. You can build it, but the problem is that it’s not compatible with another project that wants to do the same thing.”

Denelle Dixon, the CEO of the Stellar Development Foundation, says that she is hoping to help consumers understand regulations, but also wants to show the way that blockchain can improve the world. Dixon added, “We need to actually focus on getting more regulators involved.”

CEO Cole Diamond of CoinSquare stated at the event, “The majority of us went and trailblazed with our regulators.” CoinSquare is a cryptocurrency exchange based in Canada, which Diamond says left a lot of money behind when they leaned into the local laws. Though other Canadian exchanges have since crumbled, Diamond has no regrets. He stated, “I can’t suggest strongly enough the importance of doing that.”

Wirex’s Pavel Matveev stated that not being regulated is “actually quite risky.” The company is presently a startup for crypto-to-fiat value transfers around the world.

Amit Sharma, the CEO of FinClusive Capital, pushed for founders to collaborate with policymakers, despite the fact that no one disputed the slow pace of the government. Sharma remarked, “Because inherently innovation outpaces regulators.”

Ernest Mbenkum, who is both the CEO and founder of Interstellar Wallet and Exchange, is hopeful, stating,

“Governments, they can’t resist it forever. At the same time, they are going to want to be able to control it. It’s an interesting dance.”

Francisco Rivadeneyra, a research advisor at the Bank of Canada, expressed that adding fiat currencies to the blockchain could help the traditional market dip their toes in the water with minimal risk.

He added,

“If central banks decide to issue a CBDC, it’s going to be in token form, and it’s going to be delegated.”

With a delegated CBDC, the partners will be responsible for managing consensus and tracking payments.

Professor Linda Schilling of Ecole Polytechnique in Paris, commented,

“The rise of cryptocurrencies has in some ways pushed central banks to think about how to compete.”

Schilling states that citizens would have the opportunity to opt-out of the policies of a central bank if the world ultimately chooses to adopt any single cryptocurrency. Anyone that would use cryptocurrency for the majority of their financial world would not have the risk of inflation of economic growth of the bank.

On the other hand, if central banks end up taking over the peer-to-peer payments, rather than allowing cryptocurrency companies to rule that sector, data could be collected to political institutions.

She remarked,

“As you move toward central bank currency, you move much more toward a business model like Facebook and Google and so on.”

The data would make political appointees privy to a substantial amount of information on their rivals, the voters, and others.

The proposal on Libra has been one of the biggest proposals to elicit a response from central bankers. Libra has a similar idea as Stellar, but Matveev stated, “It’s fair to say that all the noise associated with Libra had a kind of negative effect.”

McCaleb expressed a different concern, stating that Facebook’s creator, Mark Zuckerberg, has no idea what he is getting into with Libra.

He added,

“Their approach seems a little bit arrogant, at least from an outside perspective. The way they announced it seemed a little bit premature.”

Furthermore, McCaleb doesn’t believe that Libra has the decentralization it needs and that it is likely that the asset will never have it. Still, he admits his bias. Mbenkum added that Stellar has an advantage since it reaches the unbanked individuals with a system of anchors, instead of solely relying on the XLM asset. This is a term used for companies that are making tokens on the network that are already backed by assets.

Ultimately, the sentiment of the event can be summaries by a comment of McCaleb,

“It seems like we are on the cusp of these things actually making people’s lives better.”

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