When Stellar (XLM) comes up in conversation, the debate usually swings between two extremes: those who see it as a forgotten project, overshadowed by more media-friendly networks, and those who argue its moment will come with institutional adoption. In recent months, a middle-ground thesis has gained traction: Stellar could become the preferred settlement layer for future stablecoins pegged to the Japanese yen and the British pound. The real question is whether that opportunity is genuine or just another mirage in the crypto space.
Let’s start with the obvious: Stellar wasn’t born yesterday. Its architecture was designed specifically to move fiat value quickly and cheaply. Its built-in decentralized exchange with an order book, fees of just 0.00001 XLM per transaction, and near-instant finality make it, on paper, an ideal candidate to host central bank digital currencies or regulated private stablecoins. But technology, as we’ve seen time and again, is only part of the equation.
The technical appeal is real, but insufficient
Those who defend Stellar’s potential point to several solid arguments. The first is its growing institutional backing. In 2026, we’ve seen companies like MoneyGram launch their own stablecoin (MGUSD) on this network, Figure introduce the first regulated yield-bearing stablecoin (YLDS), and Franklin Templeton hold more tokenized value on Stellar than on any other chain. These aren’t crumbs. It’s a small but very high-quality ecosystem.
The second argument is the geopolitical moment. Japan has been exploring its own yen stablecoin for years. The Japan Blockchain Foundation has discussed launching EJPY, though initially on chains like Japan Open Chain and Ethereum. The United Kingdom, for its part, is reconsidering its regulatory stance on sterling stablecoins, after initial drafts were criticized for imposing overly restrictive holding limits. In this context of regulatory openness, Stellar could present itself as a neutral, efficient, and already proven alternative.
However, here appears the first crack: Japan and the UK are highly protective of their financial sovereignty. It’s very likely that their official or semi-official stablecoins will end up operating on domestic chains, controlled by local consortia, not on a foreign network no matter how efficient it is. Stellar could be left out for political, not technical, reasons.
The silent problem of XLM as an asset
But there’s an even thornier issue, one rarely mentioned clearly: would the XLM token actually benefit from massive stablecoin adoption on its network? The answer is not as obvious as it seems.
Institutions issuing yen or sterling stablecoins do not need to use XLM as a medium of exchange. They can trade directly between their own stablecoins within Stellar’s DEX, touching XLM only to pay fees. And those fees are so low that even if the network processed millions of daily transactions, the resulting demand for XLM would be modest. We are not talking about a massive burn mechanism or an explosive price appreciation.
The real role of XLM in this ecosystem is more defensive: it serves as an anti-spam toll, as a bridge asset for illiquid pairs, and above all, as a guarantee that the network remains economically impractical to attack. For Stellar to be credible to regulators, XLM must maintain a minimum value. But that minimum could be much lower than many investors imagine. In other words: Stellar needs XLM to be worth something, but it doesn’t need it to be worth a lot. That is the paradox that turns this narrative into a trap for the retail investor.
Optimism or realism? The balance of adoption
In my personal opinion, Stellar has a real but limited window of opportunity. It would be naive to dismiss its potential entirely: no other network combines low fees, practical decentralization, and a track record of institutional integrations as well. If one day a major Japanese bank decides to issue a yen stablecoin for international payments, Stellar would be on the technical shortlist.
But it would also be naive to believe that such adoption, if it happens, will send XLM’s price into three figures. Stellar’s tokenomics are not designed for speculative scarcity, but for low-cost utility. That’s good for users, but not so good for those seeking appreciation.
Moreover, the regulatory factor remains an elephant in the room. The EU already has MiCA. The US is moving slowly. Japan and the UK are not going to allow a foreign chain to become the backbone of their payment system without tight control. And that control could include requirements that Stellar cannot or will not meet.
A complementary bet, not a starring role
Stellar deserves more attention than it gets, but not for the reasons optimists usually cite. I don’t believe it will “devour” Ethereum or become the single chain for sovereign stablecoins. I do believe it can consolidate as a niche player, especially in the fiat-to-fiat payment corridor, where its native design gives it real advantages.
For the investor, the lesson is clear: if you buy XLM expecting the yen and sterling to make you rich, you’ll probably be disappointed. If you buy XLM because you believe in a slow, regulated, low-margin institutional payment ecosystem, then the thesis makes sense. But in that case, patience won’t be a virtue — it will be a necessity.
Dollar and sterling stablecoins will arrive. The question is not whether Stellar will be there, but whether that will truly matter for the value of its token. For now, I remain constructively skeptical. The technology is already ready. What’s missing is politics and economics giving it permission. And that, as we well know, has never been fast or easy.
