Stellar.org, the official website behind the new payment system, defines Stellar as “a decentralized protocol for sending and receiving money in any pair of currencies.” A Ripple fork, Stellar was created with the help of Stripe Inc. to be a sort-of decentralized currency exchange.
The Stellar network is built on the concept of gateways. Gateways are “entities that let people get into and out of the network..” For instance, if you want to trade from EUR to AUD (or USD, CAD, BTC, DOGE, etc.), you will need to send the EUR to a gateway. This requires that you trust the gateway, but not any other participants in it.
You will then have a credit on the gateway for the amount of EUR that you have sent These credits will be tradable without involving the gateway. To trade from EUR to AUD, you simply need to send an order onto the network or accept an order that somebody else has already created. Another option is to first trade into the Stellar digital currency; which will then allow you to more easily trade into any other currency being offered on one of the gateways.
Stellar holds potential as a means of sending remittances, paying merchants (especially those who accept a form of currency that you do not own), and possibly even creating a new, decentralized forex exchange.
The Stellar Foundation, a non-profit that is in charge of the Stellar project, is offering $10 worth of Stellar (currently around 5,000 coins) to anyone who signs up for an account and links their Facebook account to it. You can sign up for an account at Stellar.org.