Stellar's Big Plans for Tokenization and Payments Revealed! With Denelle Dixon

the network. Privacy is the opportunity because all the traditional financial infrastructure is not going to be built on blockchain unless we have the privacy solution, and Stellar wants to be able to make that happen.

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includes ripples, r L, USD. You can earn up the five percent on that stable coin and five point two five percent on USBC. So if you'd like to learn more about Uphold and all the great services they offer, visit the link in the description. Hey folks, welcome into the Thinking Crypto podcast. I'm your host Tony Edward and joining me today's Danelle Dixon, who is the CEO and executive director at the Stellar Development Foundation. And Deanelle. Great to see you, Great to have you back on, Tony.

what's your goal there and plans and so forth.

little different. But we need to be able to take the benefits of blockchain and what blockchain has to offer, and take the needs from the consumer and the business privacy that we're hearing from the traditional financial infrastructure and

implement that. So this is an area that first of all, privacy has like been near and dear to my heart for many many many years, and things that I've advocated for also before Congress, but before I came to Stellar and before I got into the space regarding privacy and the importance of it. And so it's really fun to see these worlds merge and for us to be able to be hyper focused in right now.

could be at the send and receive level. It's ways to be able to repurpose that immutability of the blockchain history and the blockchain archive and protect that, but also make sure that the individual and the business's information is protected as well. So I think that this is a great space for us.

and what users might want. So we have a few folks that we're working with when we think about what it takes for them to be able to rea their users and what their users are demanding, whether those be businesses or end users, and using those and to create the privacy solutions that way is a really important thing. But certainly zkproofs are and there. You have the primitives already somewhat on the network, and we're going to add more primitives to it. So that others can build on it.

This is how you build an ecosystem and how you make sure the ecosystem is involved in what you're doing. Yeah. Absolutely.

things I wanted to discuss was the adoption of Stellar for tokenization where you have centrifuge, Ondo, PayPal, red Swan, you know, I was just looking at RWA do xyz sc Steller's number eight as far as total value tokenize on the chain. Tell us about what type of institutions are building here, what are some of the things you're tokenizing and more.

the real world. We want to be there where the real world bringing all of these assets for everyday financial services onto the network, and so we have the compliance layer that's built in. We have all of the things that traditional financial infrastructure has wanted and now sees, oh wait, it's here, and it's actually easy for us to do that,

and it's really exciting to see that. So we want to we want to meet the real world demand with what's available on the network, and I think we're doing that. And so you see that there's a ton of growth there and there, and there will continue to be growth. There's lots of like the ones that you just mentioned. We just that they just launched actually at Stellar at our Meridian event in Rio this year, and now we're going to see a lot more of them come to

the network too. So it's been it's been great to see frankly, what we've built, you know, eleven years ago, really be leveraged and come to fruition and really like meeting the demand of the ecosystem today.

real estate the world's largest asset class. I feel that's still you know, it's not tapped in fully yet and this is really cool that they're doing that, and I'm excited to see what how they do this commercial real estate really you know, I should say the non commercial residential I should say, and what that looks like and how that can change markets.

can own fractionalized interest in it. This has been something that actually was started years ago, Like not with red Swan, another player actually started it on Stellar. We've seen token I oil barrels on Stellar, like all of these really fun things, but I think those were a little bit early to the market, and now you see red Swan. I think it's hitting the market at exactly the right time.

The thing about it is when we think about everyday financial services, it's the ability to put your money into create capital and to be involved in capitalism in a unique way. And when you think about being able to purchase a fractionalized ownership of real estate, it actually allows your money to grow and to grow through the growth of an asset out there that is in high demand by everyone. So it's really exciting to see that and not to have barriers to entry so that anyone could

actually use this. This is what everyday financial services are and this is what we really like to focus on.

the puck is heading where a lot of these traditional assets will be on the blockchain, fractionalize, you'll be able to put them to work and DeFi and we're going to have almost twenty four to seven markets maybe for some assets, not all, but also more of a global reach, more liquidity coming in from different parts of the world. Do you see it that way and what are some of your expectations maybe by twenty thirty for the tokenization market.

for payment mechanisms, but they want to be. And so we need to let a little bit of the policy and the regulatory environment catch up with what this technology can do. But I love that these players are thinking ahead and they're trying to figure out, like what are the things like if you think about paying with stable coins,

that's amazing. But if you think about the fact that you can hold a US back treasury asset and then also make payments with that US back treasury asset, so that you're also the money is sitting there working for you and you get to leverage payments just like a traditional money market fund where you used to be able

to direct checks from it, it's pretty great. And to make that sort of on a global scale, which is what we're seeing, is also really wonderful, so I think, and then to be able to put them into yield bearing, to put them into pools so that you can generate yield from it just create so much opportunity for the end user, whether that be a small to medium size institution or an end user an individual. So I think

that we want to meet the market demand. The real world assets are going to be part of that and bringing those to the blockchain are really important. But I completely agree with you that this is the place that we're going to see a tremendous amount of growth because this is just another rail for them, and this rail should be leveraged and is going to be game changing for these traditional financial institutions because they get to do it, as you say, twenty four hours, and that is it's

a bit of a real world settlement to them. It is a little bit, I mean real time settlement to them is a little different and a little sometimes challenging for their internal infrastructure, but they're all going to get there and then it's just going to be hugely beneficial for frankly the globe.

work and it just opens up a lot of opportunities.

sides of it. The institutions find that it's super helpful for them because they can actually put their workforce to different parts of their business because now they only have a ledger that they can focus on, so they don't have to like make their internal ledgers all balanced, because they can use a global public network that they can leverage for their life which is kind of game changing

for them. But the access point is really important. I think sometimes people forget this because barriers to entry were always really high. If you think about you know, even Franklin Templeton all USUM because I know that their their asset Benji. What they've done there very well. They originally to get into their money market funds that were off chain money market funds. It costs twenty five hundred dollars. The entry point was twenty five hundred. Now it's twenty

five in Benji. That's a huge difference. And so when you talk about the fact that it might just be a little bit or they could have fractionalized ownership of different components of it, that is like, it's a very big difference about getting into an asset. And I think that that number just comes down over time once this

becomes commonplace that people are leveraging blockchain. So it's very exciting to see that, and you're right, I think it does really change the dynamics and allows more people to get involved in the traditional financial infrastructure. I mean, the number is something like seventy percent of the world, and the individuals and the world work outside of and work and don't actually leverage traditional financial infrastructure in their countries, and this can bring them into it in a very

different way. It's either because they don't trust the governments that might be involved, or they can't get access to it. And now they can, and so this is just it creates this ability for everyone to be involved, and that's what's really exciting about it.

building on Stellar and you know, if we go back to now, obviously you've been here in this industry for a long time and we've gone through the painful parts of you know, the attack on crypto and much more. Are the institutions more so coming to you now or are you and is it easier to talk to them about crypto and building and tokenization in these things?

work on both sides. You don't want to just have someone build stable coin, for example, when the stable coin isn't necessarily the thing that they really wanted to be able to put into the world. Or tokenize some of their assets, but then they actually really wanted to be able to focus on payments and maybe they could have

leverage other assets in there. So a lot of this is really great conversation now that frankly where people folks were more afraid to have before the Trump administration came in.

In the US, it has really been kind of game changing in terms of the policies and the regulatory environment being more open to it, and it's opened the doors to these traditional financial players to say, Okay, we know this technology can change the game for us, so what can we do on Stellar to make it so that it's benefiting the business but also our intended recipients.

year has been a complete one adea. It's like, you know, the storm has passed and the sunshine on us, and it just feels like a great time to be in the industry, to be building. I see a lot of people, more optimistic, entrepreneurs, innovators, a lot of investments, a lot of new things that are happening in the industry. And I thought of your article that you recently published on the Stellar website about Web three and Web two and the dynamic there and the title if I pull it

up here, let's build open highways, not for roads. Tell us about this piece and what you're seeing as far as the vision.

and figure out where the space fits for them. The piece that I wrote that you're referencing there is really talking about vertical integration, and the vertical integration and centralization is actually usually the easiest way, the easiest path forward for a lot of players, because you can control it, you can own it, you can fix it, you can do lots of things to it. The challenge of that is when you think about like the network layer, which is the layer one, and not being owned or controlled

by anyone entity creates the wrong incentives. And we saw this when I think back to my days in Web two and really focusing on like getting the Internet to be adopted, and you had all these application layers building on top and it was it was hyper focused around content. What we saw. We tried to keep things open there. We always kept the infra layer open, that network layers open.

It still is today, which is really pretty remarkable and demonstrates the power and then open network because it allows for global integration and for folks to do whatever they want on top of it. Where we saw the vertical the cannibalization, we saw that happen at the next layer, at the application layer, and so you saw like five companies ultimately own the content on the web. And the inability like when Google started, Google was able to crawl the web and like kind of get everywhere and that's

how they started their indexing. You couldn't do that today because there were walls all over the place. So it's really hard to do that. Again, that's the application layer, and sometimes content gets trapped and you have walls around the content, and having walls around content is not awesome, but it's not walls around value and money. And when you think about your value and your money being trapped in a network that you can't get access to because

there are walls up, that's the challenge. And when we think about vertical integration, and we think about sentualization, we see that that is potentially the ultimate, the ultimate crime that will happen, right crime in a very existential way, because what we have right now is the ability to move seamlessly throughout not just on Stellar, but also like

Stellar with bridging to to other networks. You have the ability to go and go to the networks that most suit you based on the things that are beneficial to you. When they're open networks, there's no shareholder demand to say, well, wait, we need to like put up toll booths to create like more growth for the shareholders and to charge different layers of it. You also aren't trying to track you into one network, which is what happens potentially, you know,

with the wrong incentives. And so we have to be very mindful of making sure that we have blockchain rails. Stay open, stay open, stay interoperable. You have to build standards around this. We have to be very focused around this network layer. So think about the Internet. The Internet is open, and it's the layer that everyone can build on top of. The Networks should be open and should be the layer that everyone can build on top of.

So that's the goal and That's why I read that, because I just saw so much of this happen back in the early days of the web.

the code remains competitive, that the outcomes are right. You don't just have one opinionated body that's going to tell you what you should and shouldn't do. That's a really important part of openness, which lots of people forget. And so when you have a permission network, it's very similar to what happens today with traditional financial infrastructure. A lot of times this is closed code that they're using. And when you have closed code, it's upgraded from time to time,

but it's upgraded by a very opinionated body. The thing could be true with the private network, and so you need to just be mindful that the best way is

for that interoperability layer. I do think it's staging. I think what happens is that these they get they get comfortable with the blockchain technology using these private networks, and then eventually they'll move to the public network because it saves them money, make sure that they're on the best, highest performing software, that all they're getting all of the ability for the compliance that's built into all of the networks,

and certainly in distellar. So I do think that we'll see more if we keep focused around the importance of openness and global uh and not permissioned. I think that we'll see a lot of players eventually move.

what you think or how you think. Players like Google with their browser's chrome, and even the social networks like Facebook and much more are going to inte integrate blockchain. And in addition, you know, do you see with the clarity in the market, they all launch maybe tokens where you have kind of the token economy these big companies and brands have.

the payment layer for all of those things. You know, when I was building a browser at Firefox, I mean at Mozilla. When we were building Firefox, one of the things I always wanted was a tip jar. I just wanted a tip jar in the upper right hand corner of the browser that you could easily tip and do these micro transactions. And we actually couldn't do that because the micro transactions were so costly at the time. Well,

blockchain makes it really simple. So if you think about leveraging blockchain in all of these different assets that they hold as these large institutions, I think it could be like that payment layer that comes through. You can integrate Google Pay with it. You can make it so that you can actually pay globally without any kind of friction. You can lower the cost. Hopefully the end users benefit from it. Whether or not the tokens are going to

be the things that it's a utility token. It makes it actually super seamless, right, It might make it really easy for them. Could be rewards tokens like you stay. It's fine for companies to want people to stay within their networks, but people should get benefits for staying within those networks. When I say networks, I mean like that the Google or you know, Apple, If you want to stay within that wall, you should get a benefit for it. So maybe they issue some kind of a reward token.

Those things are all able to be done and available on Stellar and other networks, and so I think that you're going to see a lot of sort of play in that space. But just like we saw in the early days of the web. Applications came in, they offered tons of different things, and then eventually, like everything shakes out, and then the ones who are successful because they're offering end users, businesses and individuals alike what they want and

what they need, and those players will ultimately survive. I'm just going to be there in the background constantly yelling about this need for us to stay open at the network layer. Everything else people can do their thing on, but we just need to stay open at the network layer.

And I would love the web monetization of having a tip jar and being able to monetize that way. And maybe it's a different crypto assets or stable coins or things like that that would be really cool.

Everybody's trying to figure out like where they play. Ultimately, I think that it's actually good for the market to have access to the opportunity to see, like who serious, who's going to stay in the game, who's going to do this thing and make it so that it's super valuable for us. I'd rather have fifty stable coins on Stellar than have one ourselves, because I think that that's like the market needs that. I also think it's really important to think about local stable coins, so at the

country level, like if you think about those assets. So I'm really excited to see where this all plays out. But ultimately I think it's really important that the end

user benefits from it. One of the things we kind of got wrong and Web two, and this is where I spend a lot of my energy and a lot of like the pieces that I focus on around privacy, but also just around monetization and also just the openness, is that we got it wrong with the privacy piece because users gave pieces of themselves but didn't get a lot of benefit from it. I used to always talk

about this value which change. If you're going to give something up, then you should get something in return, and that didn't always happen. And frankly with privacy, I think it's sort of became like a you didn't actually know most of the time when you were giving a piece of yourself away. We can't, like within immutable archive history and a mutable record like blockchain, you can actually see

the pieces of yourself that you're giving away. And so I think there's an opportunity to make this so that the user benefits and the user wins, whoever that user is. And that's what I want to see with blockchain.

built and how users you know, can leverage that. And one of the things I've been thinking about is maybe something that will help people to recognize the value of blockchain in addition to stable coins, is we have aid fakes and new things that are popping up, and it's hard to verify is it's real. I see people sharing stuff. I'm like, this is not real. This is like Sora

or whatever it is. But if you leverage blockchain on those platforms and you date stamp it and you put you know, the history of where this is from and who published it, that could help us verify and this is going to be a real problem. It seems like.

wait a minute, this is not our content. This and this user generated content has taken our content and changed it and now they're getting monetization from it. But it's and you know, they would do the notice and takedown to get content removed from the site, and we didn't have like a lot of times that they tried to

do was do water marking. Water Marking was complicated, But you're right, like when you think about like what blockchain can do, it can create that record and show like this is when that was created and look at what it is. And so it's a pretty cool way to be able to create that immutable record that means that this is mine. So I do think there's just so

much opportunity with blockchain generally. I mean, we focus so much on the financial infrastructure part of it, and this is a component of financial infrastructure because it's how how companies make money from the assets that they leverage. But I think that there's just so much more to see in this space.

it sometimes. And if you can have some sort of blockchain layer where people can click verify or a dialogue box opens up and says this was created yesterday or no, this is originally from Tony, this is act thinking crypto, I think that would help save a lot of people, you know, headaches.

And it's really cool to see the people that are working on this now and leveraging what they can, which is the new technologies as AI but also as blockchain.

you know, you mentioned that you would rather have Stellar be a layer for multiple stable coins rather than create one. Obviously, with the Genius Act pass, you got a lot of stable coin players entering the market, even from the state level. I think North Dakota recently said they're going to do something Wyoming launch one. At some point, there's going to have to be some sort of consolidation, right Denell to everybody in the Grandma can have a stable coin.

all be at a different place. But I think about blockchain technology, and certainly when I think about Stellar, we're like eleven years old, but we're still at the phase of we're not yet walking, like if you think about like human evolution and like human development, and we're like to the place or maybe we're walking, but we're not

yet running. And so it's okay, like we're in this space where lots of challenges and lots of opportunities are going to present themselves and I think one of them is the fact that Genius Act allowed the lots of folks to get into the stable coin game, and I think that this is beneficial for the end user ultimately, because the end user, whether they be business as or individuals, are going to get to choose what they're going to

engage with. And I'd rather see more than less because I hate to see consolidation happen too early because you want to have that competition, You want to have the best technology to win. You also want to have the players who want to stay in the space win, so it's not just like someone who's in it and then

like a stable coins weren't really what we wanted. But you're going to see people that did a stable coin and then they're like, wait, actually we're okay leveraging someone else's stable coin because we really wanted to focus on the payments angle and create a payment platform, and you're going to see people who are like, no, no, we're in this and we want to do it. So I'm

actually really excited about it. We have lots of asset issuers who have visied different types of assets on Stellar, and I think it's going to be really valuable I do think one of the important things that we're we actually are spending a lot of time thinking about is the local stable coins. When we first started, and actually when I came to Stellar at the Sele Development Foundation, there was this idea that we wanted it anchored to be representative of every asset in the world, every FIAT

backed asset in the world. And we wanted that because

we believe that that's the best way to trade. That way, you're respecting the currencies that are for each country, but you're also leveraging the beauty of the US dollar or the Euro to be able to transfer and to be able to make this, and a lot of people want to hold those assets, and so we focused there, and we actually went out very early, and there were a lot of assets that were built at the local currency level, like in the global majority, like think about countries all

over the world, but then there wasn't the liquidity. I actually think now, Tony that we're going to see people really focus around those currencies because central banks in those regions are going to want to protect the value of their currency and they're going to be comfortable with dollars coming in, but it's going to need to convert to the local currency so that they're not dollarizing the world. And I don't think that we want to end up

with the dollar iceed world. So I'm really excited to see what happens with these countries that are already thinking like, Okay, how do we protect the stability of our currency, how can we still bring money into our country even if it comes in as a dollar, Let's convert it to either is it a stable coin, is it a CBDC, or is it government debt that we're going to actually leverage to trade? Because I kind of love the ability

to think about that. So these are questions that I think that we're just now going to have to start getting into. We don't want to see a dollar ice world. We want to see the dollar be leveraged as often and as comfortably as they can. But we also want to see local governments really take control of their own currency and the protection of their assets internally.

changes FX markets and what that would look like with against settlement and much more.

CBDCs is way way complicated. But if they actually issue government debt and you can leverage that as sort of like that local currency for example, and then you want to you want to exchange that for the dollar, and you could easily do that with low cost online. I don't know. I kind of see that that's the world I want to live in, and that effects is going

to be the challenge. But I think it's also a really strong opportunity for us to be able to create the right tolls, the right expenses for people, but make it so that it's seamless.

on trying to make that seamless. They're working on their infrastructure, even in their internal infrastructure and so not the blockchain components, just to make it so that it's really smooth. I really love that relationship. I think that we need global players like MoneyGram, Western unions, like those kinds of entities to be involved at the on and off ramping layer. And then we also need to respect the fact that local players are really really important too for on and

off ranping. So again, like I kind of want it all. I don't want to limit it to anything, but I think that like what MoneyGram has done was kind of game changing for the industry to be able to take cash and to leverage it and to buy it, like to buy the US dollar backed asset, and then to be able to move between that for in a wallet

it's amazing. And to open up their infrastructure. I always think about it as like MoneyGram opening up their infrastructure like an AWS and letting even competitors get into their infrastructure. Pretty cool. And then now the fact that they built a wallet and that while it is like, you know, scaling on Stellar is fun.

to facilitate that and make that really simple. I love it, and it was just a really great conversation and a wonderful place to be. Brazil is, you know, the largest market in that America, South America that has a tremendous amount of innovation. They've always been like very forward and very very much first, even in the web two days on policy, and it's really wonderful to see that. So, you know, we've always held very tight relationships in Latin

America and South America. Lots of builders in the region, and we're going to continue to focus there. We actually hired Jose from PayPal. Jose is my chief growth officer at this point. Yes and yeah, and he is like, it's amazing because it's not yet. We're focused on Latin America, South America, the African continent if you think about just

Amia generally. We are now ready. One of the things Tony I'd say is that there have been a lot of years where I've had folks internally say to me, we need to hire people globally, we need to hire people in all of these regions, and I didn't think that we were necessarily ready to do that and to scale at that level. And we are now so scaling on growth metrics globally is our place. It's our plan and focus for twenty twenty six, and having Jose be

a part of it has been really fun. He's been here for just over one hundred days and it's been great to have him. So I think that our plans are go big and don't go home.

Scale has an XLM ETF product. Are you talking to other filers to launch products around XLLM.

these kinds of things. It's not sort of our space in terms of like, if they want to do that, then that's like they see value in it, and they see value for their consumers and there are businesses that they're working with to do that. But big picture, from my standpoint, I think it's really important and really wonderful to see new players engage in the ecosystem surrounding the Stellar network, and if that's the way to get them to do it, then that's I think that's another way.

That is another avenue in and on.

Stellar and that dats done well. Are actually another avenue to be able to go out to these and should create even a larger ecosystem around a network like Stellar. And so from that standpoint, I think they're interesting and I think that they provide another opportunity for people that might not purchase that asset on the market themselves, but they can feel more comfortable purchasing a company that's growing an ecosystem around an asset and purchasing equity from that.

So I think it's an interesting trend. I mean, I've read a lot about the fact that some of them will be consolidation. That will be consolidation that will happen there, which is also sort of part of just like the way the world works in everything. So I think it's this is one of those times where I see so many really interesting opportunities out there to demonstrate the value not just Stellar but like all the different ecosystems that exist.

And if this is another avenue in I think it's great. Yeah.

ETF from that standpoint. But I hear you you have to just like figure out as an investor, what makes the most sense for you. But I do think that they the dat's, at least the ones that I've seen go to market. And certainly Michael Saylor sort of like the pioneer of this, like he's done a lot for bitcoin and the bitcoin ecosystem, not just for the asset itself.

thoughts on the Clarity Act that's stuck in the Senate right now. We get government shut down, Well, let's say the government opens back up. You know, are you optimistic this thing could pass this quarter, maybe by December? And what do you think this means for the industry and even Firstellar.

We wanted to get that like kind of through. I think that what that does is it just tells the world, like what regulatory body is responsible for what things, and it creates the lane for the SEC and the lane for the other regulatory bodies to be able to focus on digital assets, and I think it's really important. I've advocated for the Clarity Act before it was called the

Clarity Act. I sometimes think that even at different points, the Clarity Act hasn't brought clarity, Like there's been a lot of things in there that have actually muddied the waters.

So I think we need to be careful about trying to push something through that is not going to create what we want to create, which is again the identification of the regulatory bodies and making sure that digital assets are commodities until they're not, and really thinking through those kinds of things and which agency is going to be

responsible for that. That's what's important, and we need to make that happen, and like to say it's going to happen before the end of the year, but I'm not confident given the fact that we have a lot of stuff going on in the government that's not relevant to the digital asset space.

Q one next year. Who knows, we might all get surprised and it could come to light in this year. But I think, yeah, we're this government's got some challenges for sure.

us really really focused there. And you know, I think that we've stretched a lot over the last i'd say eight years, and we've really stretched into like the even soorbon growing the smart contract platform. We've done just so much. We've seen the smart contract platform Onstellar increase one hundred and ninety four percent and TVL year on year, and

that was at the end of you two. It just continues to grow, and so I love where we've gone, but we need to focus on scaling and really creating this usability in the market, and that's what we're going to do.