The price of crypto coin Stellar Lumens (XLM) could be set to receive a boost thanks to a recent announcement by crypto custody platform BitGo. Since launching in 2018, BitGo Custody has gradually increased the number of digital tokens it can store and now Stellar Lumens have been added to the mix. The integration took place at the start of October alongside the addition of another altcoin, Dash. For those already invested in the cryptocurrency, the news will be yet another positive step. Indeed, already this year, Stellar has edged out Ripple’s XRP on a number of occasions.
At this stage, Ripple’s XRP coin is still worth around twice as much as XLM. However, the BitGo integration could be just what the latter needs to reduce the gap on a more permanent basis. By establishing itself within the blockchain-based crypto wallet, Stellar has a much greater chance of attracting more institutional investors. Thanks to its security-as-a-service capabilities, BitGo is allowing big businesses to store, trade and utilise digital tokens in new ways. By offering multi-signature wallets, the platform ensures a level of trust that standard crypto exchanges can’t.
A Safer Way for Businesses to Use Cryptos
Put simply, the multi-signature wallets create a state where transactions are only completed once multiple parties sign off on it. BitGo and its decentralised platform act as the intermediary and, moreover, the custodian of the assets. In other words, the parties signing off on the transactions don’t ever handle the cryptos they’re trading. This multi-level dynamic means that everyone involved enjoy a good level of trust and assurance. What’s more, because companies create their own sign off policies, it means they can ensure they comply with any laws and regulations specific to their industry.
Overall, when a company uses BitGo, they’re able to trade cryptocurrencies safely and, importantly, in ways that fit with their business. The upshot of this is that any crypto that’s integrated into the platform becomes instantly more attractive to major corporations. Despite the undoubted growth of cryptos in recent years, none have become a truly mainstream product. Yes, Bitcoin (BTC) has entered the public narrative so much that its enthusiasts have been the target of scams. However, it’s almost become something of a mythical entity that exists in a bubble. When you look at how its actually being used in the real world, the examples are few and far between. The efforts of BitGo won’t change the fortunes of BTC, XRP, XLM or any other altcoin overnight. However, there’s no doubt the news could lead to more high-profile partnerships.
More Trust Could Lead to More High-Profile Partnerships
The relationship between Stellar and IBM is one that’s been blossoming for a while. In September, the computer giant announced it was moving its Stellar-based payment system out of beta testing. This has certainly kept the price of XLM buoyant over the summer, but more is needed if the crypto wants to progress. BitGo could be the platform that takes Stellar to the next stage. Ripple has undoubtedly inspired financial institutions to explore the possibilities of decentralised payment systems. But what’s important to note is that the likes of American Express and Santander are only using Ripple’s xCurrent. Although this system facilitates decentralised transactions, it doesn’t use the XRP token.
Therefore, in essence, it’s not a crypto-based payment system. Of course, Ripple’s xRapid is. However, it isn’t available for commercial use yet and, moreover, we don’t know which companies are going to use it. Based on this, Stellar has a chance to take this initial interest in decentralised networks and put its own stamp on things through its association with BitGo. If that proves to be the case, buying Stellar Lumens will not only become more attractive for big businesses but individual traders.
* The information in this article is the writer’s own opinion and does not constitute investment advice.
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