Welcome to Future of Finance, where Fortune asks prominent people at major companies about their jobs, how their firm fits into the crypto ecosystem, and what this all means for how we use money.
Our latest interview is with Denelle Dixon, CEO and executive director of Stellar Development Foundation, a nonprofit founded in 2014 that supports its eponymous open-source payments network. Stellar users can send both crypto and fiat currencies around the world, and millions of transactions are processed daily.
Before joining Stellar four years ago, Dixon, who earlier worked for Yahoo, spent more than a decade at Mozilla in several roles, including COO. She said she “totally” still uses Firefox—and so do her kids.
(This interview has been edited for length and clarity.)
What attracted you to Stellar—to payments, to blockchain?
It’s very similar to why I was at Mozilla: I managed lots of functions and did a lot of work, but one of the things I loved the best about my job was the fact that I got to focus on tech policy, and advocacy, but not necessarily related just to Mozilla's products—I did it holistically. Being able to advocate for consumers, and advocate for the industry as a whole, was really important to me. And it's a rare thing that you get to do that at a tech company.
I think we made some mistakes on the content side of the web. We didn't engage a lot with the regulators and policymakers early on. We actually said, “Hey, we've got this, we don't need your help.” And the fact is, we always did. So this is a huge opportunity to take all of those learnings from the early days of the web and really put them to use here in what I call the financial side of the web. We want to have interoperability, and we want to get those things right that we got wrong.
Can you give an example of something from Web1—or even Web2—where you’ve thought to yourself, “Well, I didn’t do this as well as I really wanted to”?
For comparison, apples to apples is hard, but apples to pears might be easier. On the content side, we were like, “You don’t understand cookies, you don’t understand privacy, you don’t understand these things, and we don’t need you to engage.” And now we have state regulations that are all over the place and we haven’t really come up with a federal standard yet. We could have approached it differently from the early days to say, “There’s a lot here, but let’s focus on principles—principles-based regulation—and try to really focus on what makes sense.”
So when I think about today, so much of what we see in the blockchain space and in the crypto space is regulators staying away. I get super nervous about that, because the thing is, you're already regulated, right? But we like to pretend that we’re not. So why don’t we actually work together to create some regulation that’s principles-based that’s going to allow technology to flourish? Privacy regulation and legislation is all over the map, and it’s made it more complicated for companies to be global. It’s a great example of how it could be different here.
Where would you begin?
So much of what I try to focus on from a regulatory standpoint is stablecoin legislation. It's an easier task for us to tackle. And it creates a nice standard that can be bridged, a starting point, something that creates stability in an ecosystem. If we think about regulation more as creating stability and opportunity instead of hamstringing, then we could approach things differently.
True, we’ve seen a lot of regulation by enforcement. More and more companies are like, “Hey, just give us some rules. Let us know what we can and can’t do.” Are you optimistic of something actually happening in the near- to medium-term with Congress?
I'm in the minority, but I do believe that we'll see some meaningful regulation in the U.S. around stablecoins. And the reason why I think we're going to see it is because we have to, because if the U.S. doesn't actually take a leadership role, then we lose the opportunity to do it. The EU is pushing forward, and they’re creating standards there. If we want to be able to set our own standard, and to make it so that the dollar is still something that's leveraged globally, then this is the time.
With regulation by enforcement, it does mean, I think, we're going to have to see some of these decisions play out before we get more policymaking on those issues. Congress will be reluctant to step into those spaces when there's active litigation. But I'm very confident that we're going to see some more leadership.
Let’s say that happens. Reasonable stablecoin legislation passes. Then what?
If that comes into play by the end of the year, I think there are two things that will happen that are really, really important. The industry can take a deep breath and say, “Okay, we can all operate here, we’re not being excluded.” And a huge number of companies will say, “Okay, finally, we can take a deep breath and jump into the space”—really leverage the stablecoin piece and payments. Blockchain is particularly amazing as another rail for payment industries—it removes global borders, makes it so we have a borderless way to be able to transfer value.
We’ve heard a lot lately about proof of work vs. proof of stake, but Stellar relies on proof of agreement. Why did you choose that, and how has it been working for you?
When you're dealing with trust in a trustless environment, the environment should be trustless but you should still know who you're trusting to validate your transactions. That part of the consensus mechanism, I think, is really different and really interesting. The other thing is, because there's no fees that are generated for the validators, there's no incentive to increase the fees. One of the things we talked about is that the best incentive to be able to participate as a validator on the network is not to have any incentive other than the growth of the network itself. For payments, it's really important that you keep fees low, and you keep all the incentives aligned.
So what does this all mean, broadly, for the future of finance?
Maybe it's a bit aspirational, but the future of finance is really allowing everyone to participate. And so from the way that I look at the world, what blockchain technology, in conjunction with traditional financial infrastructure, really allows is for all of those people who have been unbanked or underbanked—or maybe they’re fearful of joining the banking infrastructure—it allows them to participate in financial infrastructure to the extent and to the level that they want to. That is what blockchain can do.
