The lumen (also known as XLM) is the cryptocurrency token used on the Stellar network. The cryptocurrency is focused on being a low-cost payment option for those without access to traditional banking in some of the poorest and remote areas of the world. XLM tokens play an important role within the Stellar network. The Stellar Network offers extremely low fees by utilizing XLM.
The Stellar Network facilitates cross-border and multi-currency transactions, converting XLM coins into any of 180 fiat currencies. The Stellar Network charges a small fee for each transaction on the platform. Fees charged on the network can only be paid in XLM. Transaction costs on the Stellar Network are typically only a small fraction of a cent.
Another reason the Stellar Network uses XLM is to provide enhanced liquidity for cross-currency payments. XLM plays a similar role in the Stellar Network compared to the role the US dollar plays in traditional foreign exchange markets. Using XLM is particularly useful for enhancing the liquidity of thinly-traded currencies.