Stellar rewrote the rules of cryptocurrencies. Now, users in Asia are leading its growth

Last July, Stellar premiered to celebratory and breathless fanfare. A new payment protocol and cryptocurrency from Jed McCaleb, creator of Mt. Gox, and backed by luminaries like Patrick Collison, CEO of Stripe, Joi Ito, director of the MIT Media Lab, Naval Ravikant, founder of AngelList, and Sam Altman, president of Y Combinator, tends to have that effect. In the intervening months, reception to Stellar has been far greater than the team anticipated, with users in East and Southeast Asia leading the charge.

Stellar might be from the creator of Mt. Gox, but McCaleb was unrelated to the bitcoin exchange’s massive failure. He sold the company to Mark Karpeles who became notorious for poorly managing the firm. McCaleb’s name still carries cachet in tech circles, which is what helped Stellar get off the ground.

Stellar wants to be different, more socially responsible than Bitcoin in how users can access and use it. Stellar is notable for acting as a currency conduit, with a self-defined purpose to “provide more liquidity between currencies.” Users with a stellar account can send Japanese yen and have a friend or business receive euros or pesos or some other currency. Transaction fees are also very low. Only US$0.001 per transaction.

Accumulation of stellar (like Bitcoin, the protocol’s titular name) does not depend on mining but is a straightforward transaction completed in seconds. Ideally, no high-level technical know-how is needed, further democratizing the alternative currency world.

Right now the only barrier to getting into the system is needing a Facebook account. As an initial solution, Stellar is using the social network to authenticate users and previously gave early-adopters 5,000 stellars to start off. Users can further accumulate stellar through bitcoin trades. Support from traditional institutions is still lacking so making receiving or depositing stellar via banks is not really an option. Even so, the service has found early traction in Asia.

“Most of our [Asian] user base is in Southeast Asia, but the biggest trading volume is from East Asia – China and Japan,” Joyce Kim, executive director of the non-profit Stellar Development Foundation, tells Tech in Asia. In total, Stellar has about 3 million registered accounts with just over half of them based in Asia. It’s a natural, but still heartening, development for Kim.

She sees Stellar as a powerful tool for enabling individuals who have limited financial literacy or access to financial institutions. “Financial services are a keystone right – it is an enabler or blocker depending on where you are in the world,” she says. In Stellar strongholds like Indonesia, where just 51 percent of the population have a bank account, it is not surprising that surveys show up to 82 percent of people want more payment options.

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Leadership and product

Talking with Kim, it becomes clear that her role at the foundation is a culmination of sorts to a high-powered career that always made time for entrepreneurship and issues on social justice. After graduating from Cornell University at 19, she attended graduate school at Harvard and then Columbia Law School. In addition to being a corporate attorney, Kim has also given much of her time to organizations like The Innocence Project, which seeks to exonerate wrongfully accused prisoners, and Sanctuaries for Families, which supports women who are victims of domestic violence.

Even while working as a lawyer, she founded Soompi, an ecommerce outfit that sells Korean makeup and pop culture products. After fours years and some funding from Softbank, she sold it to KT Corporation, one of Korea’s leading telcos. Afterwards she started work as a venture capitalist, but when the opportunity came to take the reigns of the Stellar Development Foundation, she had a decision to make. “When I was talking with Patrick and Jed and we were working on the idea of Stellar, it came down to that they were still looking for someone to run the non-technical side of things […] it was really hard for me to say no so I ended up leaving my fund to join Stellar,” she explains.

Finding new champions