Grayscale Investments Adds XLM To Crypto Collection

The firm behind the Bitcoin Investment Trust, Grayscale Investments announced earlier this week that they will be offering a fund to let professional investors gain exposure to Stellar and the platforms native cryptocurrency, Stellar Lumens.

Stellar is currently at the number six spot according to CoinMarketCap and came about thanks to Jed McCaleb who founded Ripple and the influential yet ill-fated crypto exchange Mt. Gox. The project first gained an early backing from the fintech giant, Stripe which is pushing to make its Lumens currency a part of the real world banking sector.

The decision by Grayscale is to create a dedicated fund for Stellar which is likely going to give the cryptocurrency a boost when you consider that the company is a subsidiary of the crypto massive, Digital Currency Group which also has a roster of well-heeled customers including hedge funds and family offices.

The Stellar Lumens Trust is a newly launched single asset product. Others include its flagship Bitcoin product as well as funds for the second largest cryptocurrency, XRP. In addition to this, Ethereum is included and some lesser known cryptocurrencies like Zen.

Grayscale’s managing director, Michael Sonnenshein created the new product in response to investor demand. He added that he is personally bullish on Stellar’s real-world use case as it is used as a bridge currency in “transnational money corridors.”

Sonnenshein goes on to say, “I think the theory is a sound one. An American bank may be keeping large amounts of currencies in foreign banks, and to be able to bring those balances of foreign currencies onto a balance sheet as working capital is valuable. Financial institutions won’t be required to hold balances all over the place. This will improve efficiency and shore up balance sheets for other uses.”

As reported by Fortune, using cryptocurrencies as a way to free up capital locked in foreign currency amounts is an idea that isn’t that different from that of Stellar. Ripple has been pushing a similar idea by trying to persuade banks to use their product called xRapid. This could carry out cross-border transactions using the XRP token.

At the time of writing though, financial organisations using XRP and Stellar Lumens as a bridge currency is still in its early days but many believe that it could gain some noise and thus, help the cryptocurrency surge.

What are your thoughts? Let us know what you think down below in the comments!