- Denelle Dixon warned banks against relying on proprietary blockchain systems.
- She argued public networks enable broader interoperability across institutions.
- Dixon said private infrastructure can create long-term lock-in risks.
- She urged banks to assess governance and incentives before choosing rails.
Banks risk locking themselves into costly infrastructure if they favor proprietary blockchains over open networks, according to Denelle Dixon, chief executive of the Stellar Development Foundation. Writing in BankThink, Dixon argued that decisions about blockchain rails will shape competitive dynamics for decades as financial institutions expand into tokenized assets and 24/7 settlement models.
Her comments come as large exchanges and asset managers deepen their digital asset strategies. The New York Stock Exchange has outlined plans for extended trading hours, while major banks and fund managers continue experimenting with tokenized securities and blockchain-based settlement.
Against that backdrop, Dixon framed the choice between private consortium-led systems and public networks as a structural economic decision rather than a technical one.
Public Blockchains Offer Interoperability and Risk Dispersion
Dixon contends that proprietary networks replicate the dependency patterns banks have long faced with core systems and payment providers. Infrastructure owned by a consortium or vendor, she wrote, inevitably serves shareholder interests, which can lead to pricing power and, over time, governance constraints.
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Open networks, by contrast, allow institutions to transact without bilateral agreements or middleware layers, enabling what she describes as “interoperability without permission.” The World Bank estimates average cross-border payment costs at 6.49% of transaction value, a figure often cited in discussions about improving settlement efficiency. Dixon argues that broader connectivity across public chains could help address such frictions.
She also pointed to the risk of concentration. The Dallas Fed has previously warned that reliance on major technology service providers can pose systemic vulnerabilities. In Dixon’s view, blockchain infrastructure with a single operator introduces similar exposure, whereas distributed validator networks spread operational risk across jurisdictions.
Concerns about compliance and control remain central to banks’ hesitation. Dixon maintained that asset-level governance, including freeze and clawback functions, can coexist with open settlement layers. The Stellar (XLM) CEO cited tokenized fund initiatives by large asset managers as evidence that regulatory requirements can be met on public networks. Deutsche Bank Research estimates the tokenized real-world asset market at roughly $33 billion.
For banks evaluating blockchain strategy, Dixon proposed three questions: who controls the network, what incentives guide that control today, and how those incentives might evolve as adoption grows. As tokenization scales, she suggested, early infrastructure choices could create long-lasting path dependencies that are difficult to reverse.
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