A professor at Columbia Business School has cast doubt on Ethereum’s suitability as a global financial backbone, arguing that the Stellar Network (XLM) better suits the needs of the mainstream financial sector. The comments from Austin Campbell, an adjunct professor, follow a major announcement from the US Depository Trust & Clearing Corporation (DTCC) to tokenize its custody assets on the Stellar blockchain.
Why Stellar over Ethereum?
In a series of posts on X (formerly Twitter), Campbell explained that the choice of Stellar for the DTCC project was not random. He stated that while Ethereum prioritizes resistance to censorship, it is this very feature that makes it incompatible with the demands of regulated global finance. “Censorship-resistant money and the mainstream global financial system are fundamentally incompatible,” Campbell wrote.
He explained that decentralization has real operational costs that often outweigh its benefits for institutional use. Stellar, on the other hand, offers open access and uses a trust-based consensus algorithm. This design allows financial institutions to directly select their transaction partners, a critical feature for compliance and risk management.
Manage functions in a public ledger
Campbell emphasized that Stellar’s Layer 1 protocol supports essential control functions that are non-negotiable for large financial entities. These include the ability to freeze funds, confiscate funds and maintain whitelists of approved participants. To become a mainstream financial infrastructure, he argued, a ledger must be open to participation but also possess the ability to block malicious actors.
This pragmatic approach is in stark contrast to the ethos of many public blockchains that prioritize absolute decentralization. The professor’s comments add a nuanced layer to the ongoing debate over the future of tokenized real-world assets (RWA).
DTCC’s tokenization plans
The DTCC, a critical backbone of the U.S. capital markets, recently announced its intention to tokenize custodial assets on the Stellar network. The targeted launch of the project is in the first half of 2027. This selection by such a central market infrastructure player gives significant weight to Campbell’s argument that Stellar’s design is more practical for institutional adoption.
Implications for the crypto market
This development signals a possible shift in the way major financial institutions view blockchain technology. The preference for a network that balances openness with control suggests that the future of tokenized assets may not be among the most decentralized networks, but among those that can most effectively bridge the gap between blockchain innovation and regulatory reality.
For Ethereum, which has long been considered the standard platform for decentralized finance (DeFi) and tokenization, Campbell’s criticism poses a significant challenge. It raises questions about whether key design principles are a strength or a liability in the pursuit of institutional capital.
Conclusion
The debate between idealistic decentralization and practical compliance is now playing out in real time among major financial players. Austin Campbell’s analysis, based on the DTCC’s concrete decision, provides a clear argument as to why networks like Stellar may be better suited for the future of the global financial sector. The coming years will show whether the market agrees with this vision.
Frequently asked questions
Question 1: Why did the DTCC choose Stellar over Ethereum for tokenization?
According to Professor Austin Campbell, Stellar was chosen because it offers open access and uses a trust-based consensus algorithm that allows financial institutions to select partners directly. It also supports control functions such as asset freezing and whitelisting, which are essential for regulatory compliance.
Question 2: What is the main criticism of Ethereum for global finance?
The main criticism is that Ethereum’s core principle of resistance to censorship is incompatible with the demands of the mainstream global financial sector, which needs the ability to block malicious actors and comply with regulations.
Question 3: When is DTCC’s Stellar project expected to be launched?
The DTCC has announced a target launch for the first half of 2027 for tokenizing its custody assets on the Stellar network.