Patrick and John Collison’s e-payments company Stripe has invested US$3m in the launch of a new bitcoin-like currency called Stellar, as well as a new payments network.
The Stellar Development Foundation is a non-profit organisation headed by Stripe’s CEO Patrick Collison. Its co-founder is Ripple and Mt. Gox creator Jed McCaleb.
Stellar is a decentralised protocol that allows people to send and receive money in any pair of currencies.
The system will allow people to send one kind of currency and convert it to another currency, whether it is US dollars, British sterling, euros or bitcoin.
Rather than competing with bitcoin, the Stellar network will facilitate transactions via the cryptocurrency.
The new company’s board consists of ex-PayPal executive Keith Rabois, Y-Combinator’s Sam Altman, WordPress owner and Automattic CEO Matt Mullenweg, and AngelList co-founder Naval Ravikant.
Money makes the world go round
Stripe co-founders Patrick and John Collison
“Stellar’s goal is to build a great transport layer for transmitting monetary value,” Stripe CTO Greg Brockman wrote in the Stellar blog.
“Figuring out how to efficiently move money is something we support very strongly: Stripe spends a lot of effort integrating different banking and finance protocols in various countries (17 at last count).
“We’ve always considered it unlikely that these systems would be just as fragmented in 20 years. Bitcoin has already changed the world by drawing attention to the value of open, distributed protocols that enable the transmission and storage of money. Stellar aims to advance this success by providing a way to transact in one’s currency of choice, whether that currency is fiat or digital.”
Brockman said the Stellar team is bullish about the cryptocurrency space in general and expects multiple systems to prosper.
“When the opportunity arose to help Stellar, we enthusiastically agreed. A couple of months ago, Stripe contributed US$3m to help get the project going. In return, we received 2pc of the stellars.
“However, the project is not run by Stripe. We just believe that a system with properties like Stellar’s should exist in the world, and we heartily encourage anyone interested to participate in its development. We’re going to auction a majority of our stellars to other interested companies, with any net profits being returned to the Stellar Foundation,” Brockman wrote.
Stripe raised US$80m in January in a Series C funding round that has valued the company at US$1.75bn.
Patrick (25) and John (23) Collison sold their first company Auctomatic to Canadian firm Live Current Media for US$5m (€3.2m) when they were 17 and 19, respectively. More recently, the pair have been listed among five Irishmen on the Forbes 30 Under 30 list.