Stellar Development Foundation CEO Denelle Dixon says banks have stayed away from blockchains because most chains can’t offer privacy by design.
She says privacy and openness are a spectrum, and that blockchain networks must strike the right balance or risk losing out on institutional adoption.

Digital assets have gone mainstream, with dozens of multi-trillion dollar giants holding some crypto or a related product. However, blockchain use is still limited, and according to the CEO of the Stellar Development Foundation, the main barrier is a lack of privacy.

In a new blog post, Denelle Dixon broke down the challenge most blockchains face: balancing privacy and transparency. The original vision for blockchain technology was to design a system that deters bad actors by making transactions immutable and visible. While this may work for retail use, institutional users would never broadcast their inner workings on a public ledger.

Dixon says that she has dealt with dozens of banks, and they are not concerned about consumer data, fees, speed or even consumer privacy. What they care most about is protecting their inner workings, which is the competitive intelligence that defines their position in the market. In the existing system, there are several guardrails that prevent access of other users’ information, from custodians and broker-dealers to clearing corporations.

Dixon noted:

But the very thing that makes that pitch compelling, the transparent ledger, is the thing that undoes the privacy protections institutions already have.

That’s the tension. And until it’s resolved, no institution will migrate its full portfolio onchain. Full stop.

Stellar CEO: Blockchains Must Balance Privacy and Transparency

Blockchain is built to guarantee that no bad actors can act in the shadows, not “so that one major bank can see what another is doing on a Tuesday afternoon,” Dixon says. Institutions asking for privacy is not to hide their illegal activities, it’s to protect their data from access by rivals. If one bank knew the deposits coming in for their rival, or the most active clients, it would target this rival’s weakest points and gain an advantage.

Blockchain transparency was designed so bad actors can’t hide. It was never designed so one bank can see what another is doing on a Tuesday afternoon. That distinction matters.

My latest on the real privacy conversation holding back institutional adoption.…

— Denelle Dixon (@DenelleDixon) March 9, 2026

Dixon believes that privacy and transparency are not binary; they exist on a spectrum, and blockchain networks must strike the right balance between the two.

To address this balance, these networks must decide what transaction data preserves blockchain’s integrity, what audit access regulators require, how to verify asset provenance without exposing flow patterns, and how to demonstrate system integrity without broadcasting every transaction publicly, she says.

Dixon says Stellar is achieving this balance through a technical implementation that has a transparent base layer and configurable privacy at the application layer.

One of the ways the network is enhancing privacy is through the Stellar Private Payments, a framework that allows confidential transfers using zero-knowledge proofs. As CNF reported, SPP was open-sourced last month. With SPP, users deposit tokens into a privacy pool, and any transfers inside this pool are hidden. The network uses the ZK proofs to verify the validity of the transactions without revealing sender/receiver identity or their balances.

Dixon added:

Ultimately, if we can define the right parameters by preserving blockchain’s benefits while implementing the privacy protections institutions actually need, we can build something better than what exists today.

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Filed under: Bitcoin - @ March 10, 2026 8:25 am