Stellar expands smart contract capabilities with data partnership
Stellar has announced a partnership with Space and Time that brings indexed blockchain data directly into its network. This integration aims to solve a persistent problem for developers building financial applications on Stellar. Smart contracts often struggle to access verified information from outside their immediate blockchain state, which creates real risks for projects dealing with tokenized assets, stablecoins, and other financial programs.
I think this move makes sense for Stellar’s focus on financial tools. The network has always positioned itself as a platform for payments and asset issuance, but those applications need reliable data to function properly. Space and Time will gather Stellar’s historical records and store them in a verified format that developers can query. This should help with things like analyzing wallet behavior or tracking token activity over time.
Protocol 25 upgrade adds zero-knowledge cryptography
Separately, Stellar has announced Protocol 25, also called Stellar X Ray, with testnet voting scheduled for January 7, 2026. The mainnet vote follows on January 22, 2026. This upgrade introduces zero-knowledge cryptography features directly into the network, which is a significant technical advancement.
The upgrade includes two main components: the BN254 elliptic curve for verifying zk-SNARK proofs, and the Poseidon hash function family. These tools should lower costs and improve performance for privacy-preserving applications. What’s interesting here is that Stellar seems to be trying to balance privacy with auditability. The network has traditionally emphasized transparency, but perhaps they’re recognizing that some financial use cases need confidentiality options.
Testing regulated digital currencies
Stellar is also moving forward with testing regulated digital currencies. They’ve revealed a joint pilot with U.S. Bank and PwC that began on November 25. This project focuses on issuing a stablecoin on Stellar’s network while maintaining regulatory compliance.
The timing of these announcements feels coordinated. You have the data partnership enabling more sophisticated financial tools, the privacy features for confidential transactions, and the regulatory testing for mainstream adoption. It’s like Stellar is building out different pieces of infrastructure simultaneously.
Market context and price movement
Stellar’s native token, XLM, is currently trading around $0.23, which represents a drop of about 3.72% over the past day. Technical analyst Ali Martinez suggests the price could potentially return to $0.34 based on historical patterns he’s observing.
Market reactions to technical upgrades can be unpredictable. Sometimes these announcements drive immediate price movement, other times the impact takes longer to materialize. The 2026 timeline for Protocol 25 means we’re looking at a longer development horizon.
Overall, these developments show Stellar continuing to evolve its platform. The Space and Time integration addresses a practical need for developers, while the Protocol 25 upgrade positions the network for more advanced applications. The regulatory testing suggests Stellar is serious about bridging traditional finance with blockchain technology. Whether these moves will translate into broader adoption remains to be seen, but they certainly expand what’s possible on the network.
