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Blog Commentary

Mar 4, 2020

Why We Chose Stellar as Payment Rails for Cryptocurrency Settlement

The COINQVEST platform is built with the Stellar Network at its core. Stellar is an infrastructure that transports anything of value just as the internet transports information. Running on top of the network enables us to help online businesses get paid in any popular cryptocurrency and settle funds across blockchains or traditional bank accounts with unmatched speed and transparency.

The purpose of COINQVEST is to help online businesses adopt digital money and cryptocurrency payments with ease. Merchants should be able to add Bitcoin, Ether, Litecoin, Stellar Lumens, and other popular cryptocurrencies alongside their existing checkout payment options (such as credit card or PayPal), or as stand-alone payment solutions.

Furthermore, they should be protected from volatility and potentially significant price swings of cryptocurrencies by (optionally) settling payments in their local fiat currency. The platform should be user-friendly, helping them to comply with accounting, tax reporting, and invoicing.

Finally, the service should have beautiful analytics as well as an API, which developers love 💕 because it is effortless and eliminates unnecessary overhead.

An Opportunity

Back in 2016, we began searching for a cryptocurrency payment processor for our own online business needs. We had hopes of finding one able to fulfill the above requirements. Disappointingly, most solutions were rudimentary, inflexible, tied to a single cryptocurrency, or came with complicated interfaces. No service checked all the boxes we were looking for, so we decided to build our own and make it available to everyone.

One of our first tasks to make a platform like COINQVEST happen was to read specification and integration guides for the most popular blockchains. It appeared we would need to do monitor and integrate with numerous blockchains. With that we'd be able to process payments on various networks ourselves and create the seamless and broad gateway we envisioned.

When studying the Etheruems, Bitcoins, and Litecoins out there, we stumbled upon a blockchain technology called the Stellar Network and it changed everything. Could it be that this was an open-source protocol that would help integrate any cryptocurrency into our platform and provide automated currency conversion across blockchains and traditional bank accounts? Turns out it could.

It's a Match!

Digging into the Stellar Network documentation and experimenting with the software developer kits it became obvious very quickly that using Stellar would elegantly solve three major challenges of the COINQVEST platform.

On-Ramping Payments

First, Stellar would provide normalized interfaces to deposit funds from all major cryptocurrencies onto a decentralized and transparent ledger. We could tokenize any cryptocurrency ourselves or partner with anchors ⚓ who specialize in monitoring and interacting with the top blockchains, as well as making markets. This ensures offering blockchain-agnostic customer payments to our merchants with minimal overhead and fluidly add new cryptocurrencies to the payment methods as they emerge.

Asset Conversion

Second, Stellar would become our core engine for asset conversion. Once a native cryptocurrency (like Bitcoin, Ethereum, or Litecoin) payment is captured and tokenized on the Network, we'd use the built-in Stellar Decentralized Exchange (SDEX) to convert the cryptocurrency into a settlement currency convenient for an online business' particular accounting system and regulatory environment. Stellar would help us convert Bitcoin into a local fiat currency, e.g. USD, in seconds.

Off-Ramping Payouts

Third, Stellar provides normalized interfaces to move our merchants' collected payments into any native blockchain wallet or traditional bank account. Partnering with vetted fiat anchors on the Stellar Network provides us with the flexibility and scalability needed to offer local fiat currency payouts all around the globe.

Moreover, running atop the Stellar Network would enable us to run a lean backend, provide transparency to our merchants, and let us focus on what we do best because we'd been doing it most our lives: building beautiful and useful web apps with developer friendly APIs to help (in this case) online businesses get paid.

It's a perfect match and we feel in good company with so many other projects selecting the Stellar Network for payments, too. IBM for international remittance and the USD 700 billion asset management firm Franklin Templeton to tokenize funds, come to mind. For end to end encrypted messaging and file storage, our team uses Keybase, which recently integrated with Stellar for peer-to-peer payments.

Albeit an open-source project, the advancement of the Stellar Consensus Protocol (SCP) is spearheaded by the Stellar Development Foundation (SDF). Their GitHub repositories are amongst the most active of any blockchain and their members embody a sense of culture, purpose and inclusiveness. They have been incredibly professional, helpful, and responsive throughout.

Today

Today, we're excited to be contributing to the stability and decentralization of the Stellar Network by running three full validators with the entire ledger history, a public Horizon instance, and are closely cooperating with the Stellar Development Foundation (SDF), Keybase, SatoshiPay, and LOBSTR, to maintain the Tier 1 Core Quorum Group.

The COINQVEST platform is production-ready and online businesses are getting paid in Bitcoin, Ether, Litecoin, XRP as well as XLM (or any asset on the Stellar Network). Our clients also benefit from our accounting, invoicing, and tax reporting tools. Read our guide on API checkouts or our merchant API docs to get started.

Please contact us anytime if you have questions, would like to get started or if there is anything else that we can assist you with.

Stellar
Marcin Olszowy COINQVEST Co-Founder