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- Velo Labs, based on the Stellar Lumen network, records its first live transaction on the Federated Credit Exchange Network (FCX).
- The move marks an important step in making this new type of service available to the masses.
The Velo Labs team announced that two of the company’s partners have completed the first live transaction with the Federated Credit Exchange Network (FCX). The transaction involved fintech pioneers Lightnet Group and SEBA Bank. Velo Labs President Tridbodi Arunanondchai said:
Velo Labs provides fast, secure, flexible and economical money transfer services to its partners through its federated credit exchange network. The success of this direct transaction between Lightnet Group and SEBA Bank is an important step in our journey to make these types of services accessible to as many people as possible.
The FCX is a distributed network of regulated access points connecting a set of traditional, centralized and decentralized financial partners. It is designed to combine the efficiency and freedom of DeFi with the proven and mature practices and standards of CeFi and existing systems.
The first trade used the vUSD / vCHF trading pair
FCX allows the liquid exchange of digital credits pegged to any fiat currency, while settling the transaction using the VELO token as collateral within the ecosystem. Velo Labs not only leverages technology from the Stellar network, but is also financially supported by the Stellar Development Foundation to continue development. The Velo token is issued on the Stellar Blockchain and serves as collateral to secure digital loans. However, according to the official white paper, the Velo Token can also serve as collateral for other financial services:
Velo aims to create a decentralized settlement network that enables partners to match value securely, quickly and transparently. It leverages Stellar to increase liquidity and transaction volumes, and it has a robust feature set that allows trusted partners to effortlessly interact and deliver services across physical and digital barriers. VELO serves as collateral to ensure settlement and represents the value of digital loans and fiat deposits on the network.
In its first transaction, SEBA Bank opted for a digital loan indexed to the Swiss franc (vCHF). Meanwhile, Lightnet Group opted for a loan indexed to the USD. Therefore, the transaction used a vUSD / vCHF trading pair. The exact process of the transaction is described by Velo Labs as follows:
To fully settle the transaction, SEBA Bank and Lightnet Group can convert their vUSD and vCHF to VELO tokens at any time – the same asset they used to initiate the transaction. In this way, VELO tokens act as both a bridge asset and universal security for FCX.
Velo Labs seeks to develop further
As we previously reported, Velo Labs entered into a collaboration with financial giant VISA at the end of November. Other patrimonial finance partners, CeFi and DeFi should follow. The ability to deliver liquidity from various financial ecosystems positions Velo Labs as one of the blockchain projects in the market that could enable mass adoption.