After the fallout with Ripple executives, Jed McCaleb left to build Stellar (XLM) which has now arrived in the Philippines and is disputing its remittances market with Ripple.
Velo Labs, a Stellar-powered global settlement network, has recently partnered with Philippine Digital Asset Exchange (PDAX) to bring its blockchain-based cross-border payments solution to the Philippines.
Jed McCaleb sits on Velo Labs’ board of advisors as the company is fueled by XLM, the digital asset developed by McCaleb, who also co-created XRP, the token powering Ripple’s products and services.
Like XRP, Stellar (XLM) is an open source, decentralized protocol for digital currency to fiat money low-cost transfers which allows cross-border transactions between any pair of currencies.
Stellar was launched in 2014 by Jed McCaleb after leaving Ripple, but why did he leave the firm in the first place, many have asked before. David Schwartz, the current CTO of Ripple, explained his version on Quora.
“Jed had a long string of bad ideas that Ripple’s Board of Directors refused to implement. So Jed started Stellar based on those ideas.
“Jed wanted Ripple to do a Facebook giveaway. Ripple would not do that. So that was one of the first things Stellar did. The giveaway was generally considered a disaster. As it became clear that each of his rejected ideas were bad, Stellar pivoted to become a clone of Ripple.
“Jed tried to dump his XRP quickly and Ripple acted to stop him through a series of lawsuits. Thanks to Ripple’s refusal, Jed’s XRP will probably be worth more than $1 billion. He will probably be the only person to become a self-made billionaire despite his best efforts”, David Schwarts continued.
“When companies solicit investors, those investors get stock with voting rights. Some of them get seats on the Board of Directors. And you bring on smart people to help you make good decisions. Heck, Jed brought in Chris to be CEO. Jed’s reaction to not getting his way on these issues was to publicly say bad things about the company and start a competitor. IMO, unless you think the company is doing something illegal or severely immoral, betraying your investors and employees that way is unconscionable.
“Note that this is not a comment on what Stellar is doing now or their likelihood of success. It is just about why Jed McCaleb started Stellar. I was there. But I cannot claim to be unbiased. This is just the parts about which I am relatively certain. There are things that I suspect that are even worse.”
Jed McCaleb is indeed one of XRP’s biggest whales and has been systematically selling its holdings. By mid-November 2021, he had sold $2,147 billion worth of XRP, which was 80% of all his XRP sales since 2016.
As to Stellar, the XLM-powered network is gaining ground, having ensured an open remittance corridor into the Philippines through PDAX.
With an estimated 34 billion USD in remittances arriving into the Philippines each year, Velo Labs and PDAX aim to improve on the current inefficiencies by leveraging Velo Labs’ blockchain payment infrastructure.
The Philippines is a very attractive remittance market because of its large diaspora. Ripple has entered the jurisdiction a while ago.
A recent partnership involving the Philippines was in July 2021, when XRP-powered SBI Remit, the largest money transfer provider in Japan and a subsidiary of Ripple shareholder SBI Holdings, has gone live with Ripple’s ODL as part of a project for remittance payments from Japan to the Philippines.
The firm teamed up with mobile payments service Coins.ph and digital asset exchange platform SBI VC Trade to provide faster, more affordable remittance options for customers.