Assume a money transfer company in one country collects the funds (1000 USD) to be transferred from the customer. The Stellar Blockchain will then convert it into an equivalent amount of digital fiat tokens or XLM Lumens.
In this step of the transfer process, the Stellar Distributed Exchange (SDEX) will trade the 1000 USD tokens of the sent amount to 4090 BRL (Brazilian currency), the currency of the receiver. This trading process is quite similar to trading crypto tokens on an exchange, and this trade takes place on the Stellar Exchange. The process of the fiat tokens being converted back into currency is via a path payment operation.
Once the trade is completed, the receiver or beneficiary will find the transacted amount in their respective accounts. This transferred amount can be deposited to the recipient’s wallet, bank account, or another local trail. The entire process is carried out seamlessly, with minimal costs being incurred.