Stellar Lumens makes it possible to bridge the world’s financial infrastructure to set up anchor services.  These Anchor services are fiat on/off ramps for the network.

Anchors are used to accept deposits and withdrawals through traditional rails, and eventually they convert them to and from digital currency.  They help in the process of interoperating with one another and also with several other applications built on Stellar.  It is used to empower users to transact across borders and across currencies. 

Stellar Tweeted:  “Stellar makes it easy for regulated financial institutions to set up anchor services, which are fiat on/off ramps for the network. This guide explains which standards to implement to take advantage of this global network of anchors.”

At present, there are two standard transaction flows on which Stellar anchors and applications depend in order to interoperate with each other.  There is a technical specification which explains how to set up and consume a set of uniform APIs.

SEP-24 specifies how the anchors interoperate with the wallets to permit users to deposit and withdraw assets. SEP-31 specifies how anchors interoperate with other anchors to permit users to make bank-to-bank cross-border payments.

Those who are building an application will be able to think about two different flows, thus creating two different experiences for end users.  With SEP-24, users will be able to interact directly with the anchor service that has been integrated when they are making their deposits or withdrawals. When a user is able to sends a remittance payment to another user, the receiver will need to actively withdraw their digital asset balance eventually ending up with money in the bank or cash in hand.  With SEP-31, the users will only interact with the application when depositing or receiving funds.

Sydney Ifergan, the crypto expert tweeted:  “I looked in to the SEP-24 vs. SEP-31 implementation guidelines in the Stellar Ecosystem, Stellar Lumens (XLM) are indeed doing a great job providing clear guidelines.”

Stellar Lumens (XLM) Laws Regulations and Specifications

The Stellar Ecosystem Proposals are very good and needed.  They are open specifications which define the best practices for building a product or service on the Stellar Ecosystem.  Mostly, they explain how companies will be able to build on the Stellar network by setting up the infrastructure external to the network, which includes APIs and clients to consume them. They need to maximize their interoperability with other network participants in a way to facilitate compliance with local laws and regulations.