• The CEO of the Stellar Development Foundation, Denelle Dixon, has criticized the lack of innovation in the traditional financial system and suggested the Stellar Lumens blockchain as a basis for the digital dollar.
• While governments and institutions are seeking new ways to issue money, caused by the COVID-19 pandemic crisis, Dixon emphasized that the Stellar network was designed to launch digital money such as a CBDC.  

Denelle Dixon, the CEO of Stellar Development Foundation (SDF) spoke at the Consensus Distributed event about the current financial crisis. Dixon criticized that there is little innovation in the financial system and that it is  vulnerable due the lack of innovation:

The existing financial infrastructure is outdated, operating on models that have been unchanged for decades. In the context of this pandemic, just look at how many people have waited weeks for paper stimulus checks.

As reported by CNF, in several countries such as the United States and Canada, the governments have decided to send a direct subsidy to its citizens. However, the measure was delayed while the most appropriate way to implement it was being discussed. In this regard, Dixon proposed that the Stellar Lumens network as the most appropriate platform for issuing a digital dollar and any digital coin issued by a central bank:

CBDCs was exactly the type of digital money Stellar was designed for, connecting today’s real-world financial infrastructure with the digital blockchain world.

The outcome of the crisis and the potential changes that the COVID-19 pandemic could bring to the world might also be an opportunity for the blockchain sector. However, there is a possibility of increased regulation against projects like Stellar Lumens, as has happened with Facebook’s Libra. In this regard, Dixon said:

The network layer is very much like the internet, it shouldn’t be regulated. Stellar itself is the layer that everyone can build on top of, so I don’t see regulation with respect to that.

Digital dollar issuance still a long way off

On the other hand, Stellar co-founder Jed McCaleb said that although the Stellar Network was designed to be the basis for a CBDC, this possibility is still a long way off. Nevertheless, McCaleb revealed that the SDF has maintained contact with governments to explore this possibility:

We’ve talked to a few governments around the world about CBDCs. I still think it’s pretty early for that and especially early for them to issue these things on a public chain, most (governments) when they get into the nuts and bolts of it they want to control it. So, I still think the whole CBDC story is far away.

However, Stellar Lumens is not the only platform that has been proposed to issue a CBDC, like the digital dollar. The blockchain Hyperledger consortium and its eThaler project are another viable option as reported by CNF. The eThaler project is designed to allow a central bank to issue a digital currency on the Ethereum blockchain. However, as Stellar’s co-founder stated, the issuance of a CBDC on a public network remains a very distant possibility.

Recommended for you:

• Buy Stellar Guide
• Stellar Wallet Tutorial
• Check 24-hour Stellar Price
• More Stellar News
• What is Stellar?