29 Aug A Deep Dive Into Ripple And Stellar Digital Currencies And Their Applicability For Online Payments Across Africa.

Whilst we are not there yet in terms of digital payments adoption for use in online payments and eCommerce payments across Africa, at African Payment Solutions, we have been doing research and report on the highlights of our study on leading cross-border digital currencies Stellar and Ripple in terms of their applicability to the world of online payments.  So for those who are interested in Ripple and Stellar digital currency protocols here is an initial introduction to them.

Ripple vs Stellar.


The global payments arena is growing at a record pace; forecasted to become a 2 trillion dollar industry by 2020. Most cross-border payments use the SWIFT protocol for payment routing. This process has three main pain points for network users; speed, cost, and transparency. 

While there are many blockchain solutions being created to mitigate these issues, we compare the solutions presented by Ripple’s XRP and Stellar’s XLM.  Both projects are similar in their mission to create a frictionless payments system, but there are notable differences in the following areas: philosophy and mission, consensus mechanism, social sentiment, compliance and KYC/AML, token supply and inflation, founders, key partnerships and initial capital/financial stability. 



The story of Ripple and Stellar predates the launch of Bitcoin. Ripple was originally developed in 2004 to create a decentralized monetary system. Jed McCaleb joined the team in 2012. After some conflict with the Ripple leadership, Mr. McCaleb originally created Stellar from a fork of Ripple code. This was subsequently overhauled to become today’s Stellar Lumens. With common technological roots and philosophical differences, Ripple and Stellar present a great opportunity to examine how philosophy affects technology. We acknowledge that both projects are dynamic leaders in the blockchain space.  For a general overview on the projects, please visit: Ripple.com and Stellar.org.


Final Thoughts

Examining the history and growth of these projects also enhanced our understanding of why different blockchains and ecosystems are needed. Each project’s code base dictates a set of rules by which that community will abide. These rules are the basis of culture that is adopted by its participants. We do not live in a one-size-fits-all world and that is reflected in the variety of blockchain projects and protocols that are being developed. The origin of the Stellar blockchain as a result of philosophical differences between Jed McCaleb and Ripple leadership (Chris Larsen) demonstrates how disagreements can prove to be very useful. If necessity is the mother of invention, discontent may be the mother of innovation. While McCaleb’s legal battle with Ripple continues, both blockchains are evolving with success. 

Brad Garlinghouse (Ripple CEO) has a couple of opinions that resonated very highly with our group: 1. If the asset solves a real problem, then it will have value. 2. The revolution of blockchain is going to happen from within the system. The second view can clearly be a subject of debate, but we need to make a distinction. Bitcoin and other more decentralized currencies have found success coming from ‘outside the system'. However, Ripple is not trying to be simply a peer-to-peer payment mechanism. Its goal is to overtake or at least complement current longstanding payment rails with a more efficient and transparent system. 

As stated in the beginning, our aim in examining these projects was to compare them in regards to their ability to perform cross-border payments. While we believe that the Stellar blockchain will have success in the field of payments, especially direct to consumers, our team concluded that the family of Ripple services would gain a much greater market share. 

Though both projects have overlapping technological architecture and similar supply, the built in compliance mechanisms and vast number of Ripple partnerships cannot be ignored. Our prediction is that Stellar will achieve more success in the area of creating collateralized assets through its built in anchor protocol system, and Ripple will be the clear leader in institutional cross-border payments.

Thanks to my co-researchers Lisa and Petrus for their work and keen insights on this project.  Please contact us if you would like to read the whole research paper.

If you are a multinational eCommerce company looking to expand to Africa for your online payments through a single integration for card, and for mobile monies, then contact African Payment Solutions now

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