Fintechs Are Going All In On XLM | The Story of PayFi

In every era of finance, there comes a moment when something new arrives and threatens to change everything. In the early days, it was paper money replacing gold coins. Later, credit cards reshaped spending. Then came online banking, followed by mobile payments. Now, a new figure is stepping onto the stage of global finance — a character called PayFi.

PayFi’s name comes from payment financing, and its mission is as ambitious as any financial revolution before it: to make money move across the world as easily as sending an email. Unlike the complicated structures of traditional banking, PayFi’s design is simple — connect consumers and businesses to faster, cheaper, and more reliable ways to access money. But like any great story, PayFi cannot succeed alone. To fulfill its mission, it has built an alliance of powerful partners — each with a history of collaboration and a role to play in reshaping the financial landscape.

The Birth of PayFi

PayFi was born from frustration. Traditional finance, while reliable in many ways, was riddled with inefficiencies. Transactions could take days. Remittances were expensive. Credit was often inaccessible to those who needed it most. And the compliance and custody infrastructure was designed for a world that moved slower than the internet age demanded.

Blockchain technology offered a way out. It promised speed, transparency, and cost efficiency. But the blockchain world was fragmented — some chains specialized in speculation, others in smart contracts, and many more were simply experiments. PayFi emerged as a framework to bring the best of blockchain into one system, not for speculation, but for real-world finance.

Stellar: The First Ally

Every hero needs a foundation, and for PayFi, that foundation was Stellar. Created by Jed McCaleb, Stellar was designed with one purpose: to move money. Its lightweight structure, low fees, and near-instant settlement times made it the perfect operating system for PayFi’s mission.

This wasn’t theory. Stellar had already proven itself. In 2020, Stellar partnered with the Ukrainian government to help build a central bank digital currency. Later, Circle chose Stellar as one of the blockchains to issue USDC, making cross-border transfers faster and cheaper. These weren’t experiments — they were real-world demonstrations of Stellar’s power as a payments network.

For investors, this alliance is crucial. Stellar’s native asset, XLM, isn’t just a token floating in the crypto universe — it’s the heartbeat of PayFi’s transaction layer. Every transfer, every settlement, every connection flows through Stellar’s rails. As PayFi grows, so does the demand for XLM.

Alongside Stellar, Solana joined as another ally. Known for its speed and scalability, Solana complemented Stellar by ensuring PayFi could handle both microtransactions and massive remittance flows. In fact, Circle recently expanded USDC issuance to Solana, enabling faster stablecoin transfers and proving that Solana could stand shoulder to shoulder with Stellar in PayFi’s mission.

The Currency Guardians

But money is only as strong as the currencies that flow through it. PayFi needed partners who could bring stability, liquidity, and trust. This is where the currency guardians arrived.

Circle was first. USDC has been live on Stellar since day one, and its integration with MoneyGram gave millions of unbanked individuals the ability to cash in and out of USDC at local storefronts.

PayPal shocked the industry in 2023 by issuing PYUSD, and its decision to expand to Stellar was no accident — Stellar’s design aligns perfectly with PayFi’s mission.

Paxos has worked with PayPal for years as the custodian behind PYUSD. Its move to bring assets like USDP and PAXG to Stellar is a natural progression.

Tether remains the largest stablecoin issuer, and though more controversial, its integration into PayFi ensures liquidity across regions underserved by traditional banks.

RD Technologies, based in Hong Kong, is using Stellar’s rails to explore stablecoin use in Asia’s tightly regulated financial centers.

For XLM holders, this layer is one of the most bullish signs. Every new stablecoin issuer represents recurring demand for Stellar’s rails. As the stablecoin market grows into the trillions, PayFi ensures that Stellar is one of the networks benefiting directly.

Protectors of Custody and Compliance

Growth brings scrutiny, and PayFi needed defenders.

Fireblocks, for example, has already secured billions in digital assets for institutional investors, including PayPal itself. Ledger remains the most widely used consumer hardware wallet, protecting retail investors who use Stellar’s rails. Cobo, meanwhile, has integrated with both Stellar and Solana, helping exchanges and fintechs safely custody assets.

On the compliance side, Chainalysis and TRM Labs have worked with regulators and law enforcement worldwide to track illicit blockchain activity. Their involvement in PayFi signals a critical shift — this isn’t DeFi trying to escape oversight. This is blockchain infrastructure designed to work hand-in-hand with global regulation.

Builders of Strength: Financing Allies

To rival traditional banks, PayFi needed financial intelligence.

Huma, which enables decentralized lending, has already worked with partners like Credora to issue credit against digital assets.

Chainlink and Pyth have powered oracle services for some of the largest DeFi platforms, and their expansion into PayFi gives institutional-grade pricing feeds.

S&P Global, a name synonymous with credit ratings, has explored blockchain-based credit scoring and risk assessment. Their participation ensures PayFi can speak the same language as Wall Street.

This mix of on-chain and traditional credibility means PayFi isn’t trying to replace banks outright — it’s competing on their terms.

The Application Warriors

The true test of PayFi’s strength is adoption — and here, its allies are already delivering.

Shift Markets brought the South African Rand onto Stellar, proving that PayFi could expand into emerging markets.

Bitso, one of Latin America’s biggest crypto platforms, used Stellar and USDC to enable faster remittances. In Mexico alone, remittances hit $63 billion in 2023 — a huge opportunity for PayFi’s rails.

Arf partnered with Visa and Circle to facilitate instant cross-border payments, showing that old guard players could work directly with blockchain networks.

Coins.ph, a leading exchange in the Philippines, integrated Stellar to provide affordable remittances for one of the world’s largest overseas worker populations.

Xoom, PayPal’s international payments arm, has linked to Stellar’s network for transfers into India and Brazil.

Onafriq became another African anchor, offering cash-in/cash-out services across multiple countries — tying PayFi to one of the fastest-growing financial regions in the world.

Each of these represents real transaction volume already happening today, not just theoretical adoption.

The Old Guard: Traditional Finance

Every hero faces resistance, and PayFi’s comes from traditional finance. Banks profit from inefficiencies. Remittance companies thrive on high fees. Compliance-heavy systems create friction that slows innovation.

But the tide is shifting. Visa has partnered with Circle to settle USDC transactions. PayPal has chosen Stellar as one of its stablecoin networks. These are not small fintechs — they’re global giants bending toward blockchain. And looming on the horizon is Mastercard, which has already experimented with CBDC testbeds. When it joins PayFi, the balance of power could tilt permanently.

What It Means for Investors

PayFi’s journey is not just a story — it’s a thesis for investors:

XLM Utility = Demand: Every payment, remittance, or stablecoin issued through PayFi strengthens Stellar’s role.

Proven Partnerships: Circle with MoneyGram, PayPal with Paxos, Visa with Circle — these alliances already exist, and PayFi ties them together.

Network Effects: The more fintechs adopt Stellar through PayFi, the harder it becomes to replace.

Early Entry: Investors holding XLM today are positioned before the floodgates open — with Mastercard, Stripe, and others still on the sidelines.

Closing Chapter (For Now)

PayFi’s story is still being written, but the narrative is undeniable. Through past collaborations and current alliances, it is building the most complete financial ecosystem blockchain has ever seen. For XLM holders, that makes PayFi more than just a framework — it’s a growth engine for their investment.

The old guard may resist, but history shows what happens when technology and finance align. PayFi’s allies — Stellar, Solana, Visa, Circle, PayPal, Bitso, and others — have already proven they can work together. Now, they’re doing it at scale.

For investors, that means holding XLM isn’t just speculation. It’s a stake in the next era of money.