What Stellar is built for
Stellar is a public ledger launched in 2014 with one job: moving money, including fiat, between people and institutions cheaply. Its consensus is federated: validators choose whom they trust; there is no mining and no staking. Ledgers close every few seconds, fees are a fraction of a cent, and the base layer has features other chains bolt on through contracts: issued assets, an order book, and payments that convert between assets on the way. XLM pays fees and satisfies reserves.
The design assumes that most value on Stellar is not XLM but tokens for dollars, euros or pesos, issued by regulated companies called anchors that hold the fiat and let users deposit and withdraw it.
Anchors: the fiat edge of the network
An anchor issues a Stellar asset backed by something it holds off-chain and offers a way in and out: a bank issues a dollar token redeemable to a bank account; a remittance company issues a peso token paid out in cash. Ecosystem standards define how a wallet talks to an anchor, so a wallet can show a deposit button that opens the anchor's flow.
The best-known example is MoneyGram's integration, launched in 2022: a user of a supporting wallet converts USDC on Stellar to cash and back at MoneyGram locations in many countries. That is the network's purpose, a stablecoin that ends in a cash pickup.
USDC on Stellar, and PYUSD
Circle has issued native USDC on Stellar since 2021: the same dollar and reserve as elsewhere, a separate supply on a separate ledger. Its freeze works the Stellar way: the issuer revokes a holder's authorisation on the asset, which stops it moving. Anchors, payment companies and the MoneyGram flow all use it.
In 2025 PayPal announced PYUSD on Stellar; verify its current status and liquidity before relying on it. A second regulated dollar is a hedge for the network: payment flows are not tied to one issuer.
How a Stellar asset works for a holder
Stellar has no token contracts in the Ethereum sense. An asset is a code plus an issuer account, and holding it requires a trustline: an entry on your account saying you accept that asset from that issuer, up to a limit. A payment to an account without the trustline fails.
Reserves are the second concept. To prevent spam, accounts must hold a minimum XLM balance, based on a base reserve of 0.5 XLM.
| Item | XLM locked |
|---|---|
| Account existence | 1 XLM (two base reserves) |
| Each trustline | 0.5 XLM |
| Each open order or extra signer | 0.5 XLM |
| Transaction fee | 0.00001 XLM minimum per operation, more when busy |
So a wallet that will hold USDC needs at least 1.5 XLM: one to exist, half for the trustline. Sending USDC to an empty address does nothing until it is funded with XLM and has the trustline. Wallets show the reserve as unavailable balance; newcomers see XLM they cannot send.
Memos are the third concept. Exchanges and custodial services receive all customers' funds at one Stellar address and tell them apart by a memo on the transaction. A deposit without it lands in the shared account and needs manual recovery. Your own wallet needs no memo. The mechanics, and XRP's equivalent destination tag, are in Destination tags and memos explained.
Soroban
Soroban, Stellar's smart-contract platform, went live on the main network in early 2024; before it the ledger had no general contracts. It runs Rust contracts compiled to WebAssembly beside the classic ledger; a classic asset can be wrapped for use in a contract. Lending and automated market makers exist on it, but the network's volume remains payments; treat Soroban DeFi as young.
Stellar vs XRPL vs TRON for moving dollars
| Stellar | XRP Ledger | TRON | |
|---|---|---|---|
| Main dollar | USDC (native), PYUSD announced | RLUSD, USDC | USDT |
| Holding requirement | Trustline, 0.5 XLM; 1 XLM account minimum | Trust line, 0.2 XRP; 1 XRP account minimum | Gas only |
| Fee per transfer | Fraction of a cent, in XLM | Fraction of a cent, in XRP | Varies with energy and bandwidth, paid in TRX |
| Custodial deposits | Memo | Destination tag | Address only |
| Built-in exchange | Order book and path payments | Order book and AMM | No; smart-contract DEXes |
| Fiat ramps | Anchor network, MoneyGram cash | Ripple's payment partners | Exchanges |
| Where it dominates | Remittances, aid payouts | Institutional corridors | Retail stablecoin transfers |
If your counterparty needs USDT, Stellar is irrelevant. If the money ends in cash where an anchor operates, Stellar may be the only rail that goes all the way.
How to hold XLM
- Lobstr is the most used mobile and web wallet built for Stellar; it handles trustlines and anchors in its interface.
- Freighter is the Stellar Development Foundation's browser-extension wallet, needed for Soroban apps.
- Hardware wallets from the main vendors support Stellar, through Lobstr or Freighter.
In every case 1 XLM stays locked, and each added asset locks 0.5 more.
How to get XLM without an account
XLM has a coin page: Stellar (XLM). The direct pair is BTC to XLM; XLM is also in the swap form on the homepage from other assets. USDC on Stellar is not in the swap form at the moment; to end up with it, get XLM here, then use an anchor or the built-in exchange from your wallet.
- Open the pair, enter the amount and your Stellar address, optionally a refund address, and click Swap now. If the address belongs to an exchange, add its memo; a self-custody wallet needs none.
- You get a unique Bitcoin deposit address and a status page; no login.
- Send exactly the shown amount. The floating rate locks after two Bitcoin confirmations.
- XLM arrives at your address. For a brand-new address the first payment must be at least 1 XLM.
Mistakes to avoid
- Sending XLM to an exchange without the memo. Recoverable slowly, if at all.
- Sending USDC on Stellar to an address without the trustline. The transaction fails.
- Sending less than 1 XLM to a new address. The account is not created.
- Equating payment volume with fee demand for XLM. Fees are tiny by design.
BTC → XLM
USDT (TRC-20) → BTC