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Blockchain startup, Chain, announced Monday that they had been purchased in cash by a subsidiary of the Stellar Development Foundation, resulting in the formation of a new entity, called Interstellar. The announcement came months after rumors had first surfaced regarding the partnership.
According to Chain’s Crunchbase page, the San Francisco-based blockchain startup has raised over $40 million in private capital since its founding in 2014, and has worked with such companies as Nasdaq, Visa, and Citigroup. The startup describes themselves as building “cryptographic ledger systems that make financial services smarter, more secure, and more connected.”
The acquisition deal between Stellar and Chain was officially finalized on September 5th and was first announced by the startup on September 10th. The new venture – called Interstellar – will be headed by former RRE Ventures partner and Chain CEO, Adam Ludwin, who will serve as the project’s CEO, and Jed McCaleb, the XRP and Stellar protocol creator, who will serve as the project’s CTO.
Ludwin spoke about the acquisition of Chain by Stellar, saying:
“All of the clients that we have now have effectively shifted from using a traditional database model to using a tokens model, issuing assets on a local environment. By partnering with Stellar you can fire an asset to another institution.”
Ludwin also noted that the new entity will retain all of Chain’s current employees, and that the majority of the employees will retain similar positions. Previous shareholders in Chain were bought out by Stellar, and although the exact purchase amount was not disclosed, Ludwin said that it was for “significantly more than $40 million.”
He also noted that Chain accepted the offer after much consideration, adding that “Chain did not need to sell the company. This needed to be a great strategic move and a great return and it was both.”
Chain Merger Marks Latest Use-Case for Stellar
In addition to the recently announced acquisition of Chain, Stellar’s blockchain network and cryptocurrency (XLM) have seen multiple other examples of being adopted by large corporations, including IBM.
Notably, IBM recently launched their Stellar-backed blockchain World Wire Payments System, which will offer real-time, cross-border, payment settlement using Stellar’s blockchain network. The World Wire system will operate very similarly to Ripple’s blockchain settlement systems, that utilize digital currency to transfer large amounts of money cross-borders with little to no fees.
IBM describes their new product on their site, saying:
“IBM Blockchain World Wire, the new financial rail that can simultaneously clear and settle cross-border payments in near real-time. Integrating with your existing payment systems, you can replace costly opacity with affordable transparency – and that can bring greater financial opportunity to all.”
IBM also notes that the platform runs on Stellar’s blockchain:
“Using blockchain technology and the Stellar protocol, IBM Blockchain World Wire makes it possible for financial institutions to clear and settle cross-border payments in seconds.”
Although World Wire runs on Stellar’s protocol, it is important to understand that institutions looking to use World Wire are not required to use Stellar’s cryptocurrency, XLM. IBM’s site explains that customers can use any type of cryptocurrency that meets their needs, including stable coins. They explain that “Two financial institutions transacting together agree to use a stable coin, central bank digital currency or other digital asset as the bridge asset between any two fiat currencies.”
Stellar Lumens (XLM) is trading at $0.19 at the time of writing, down 2.2% on a 24-hour trading period.
Featured image from Shutterstock
