Stellar eyes blockchain start-up Chain
Stellar, currently the world’s seventh-largest cryptocurrency is in talks to acquire Chain, a San Francisco-based blockchain start-up building cryptographic ledgers for the financial industry according to a report in Fortune, which cites people familiar with the deal as its source.
The magazine also believes the sale price to be $500m in Stellar’s digital currency Lumens (XLM). This would prove manageable for Stellar, whose current valuation by market cap stands at $4.3bn.
Chain’s backers should be able to hold or sell their payment immediately after the transaction, Fortune adds.
Used by Nasdaq
Since its formation in 2014 Chain has raised more than $43m in a series of funding rounds, which have attracted major venture capital firms such as Khosla Ventures, RRE Ventures, Capital One, Visa, Citigroup, Nasdaq and Orange — France’s main telecommunications company.
Chain’s blockchain developer platform aims to provide banks and financial institutions the ability to create their own private networks.
Chain seeks to package this technology for the finance sector and isn’t a blockchain in itself. CEO Adam Ludwin has dismissed the suggestion that Bitcoin and other cryptocurrencies are opponents of traditional finance. “People want to believe that there’s going to be this mythical coin that comes out of Silicon Valley that the world starts using and that all of Wall Street just falls into the ocean,” he has said.
Nasdaq, the world’s second-largest stock exchange, has already confirmed that it will partner with Citi in using Chain’s technology to build a distributed ledger-based payment system.
Announcing the initiative, Nasdaq said that it recognises the advantages of blockchain. “Emerging technologies like distributed ledger technology are driving digitisation and enabling new platforms and blockchain ecosystems that can provide real-time digital solution.”
A logical union
A tie-up between Stellar and Chain would appear to be a good fit. With funding from payments company Stripe, its blockchain technology is used by companies from messaging start-up Kik to IBM, which use Lumens to send payments between countries in the South Pacific region.
With Stellar providing the money, Chain offers the engineering talent, notes Fortune. One source familiar with the deal told the magazine it is likely in response to the heated battle for top developers between crypto companies.