Zelle founder to helm Ripple rival Interstellar

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Mike Kennedy, the creator of the person-to-person payment network Zelle (then called clearXchange), was named Thursday as the CEO of Interstellar, a blockchain and digital currency payment technology company.

Interstellar is taking on Ripple and Swift to offer technology to banks for handling global payments.

The firm relies on Stellar, an open source protocol that enables cross-border transactions between any pair of digital and fiat currencies. Like Ripple, Interstellar provides a distributed ledger that banks can use to send and receive money internationally without having to go through a network of correspondent banks the way they currently do through the Swift network.

Using Ripple or Interstellar, a bank could use local currency to buy a digital currency and sell that to the receiving bank, which would exchange the cryptocurrency back into its local currency.

In an interview, Kennedy touted the potential of Interstellar.

“It's newer technology, and because of that it can move payments faster and at lower cost,” he said.

There are some important differences between Interstellar and Ripple, he said. Unlike Ripple, which aims to make its XRP the digital currency that is used to in global money transfers, Interstellar is crypto-agnostic, according to Kennedy. Users could use Stellar’s cryptocurrency, Lumens, or they could use bitcoin, a stablecoin or some other digital currency. This is a key distinction given the controversies around XRP.

Still, Kennedy acknowledged that there are certain components needed to make Stellar a complete, end-to-end answer to global payments. One is tokenization of assets. “No one is stepping up in the tokenization role,” he said.

Stellar Development Foundation, which created the Stellar network, is not in the best position to do that, Kennedy said, because it's a nonprofit.

Liquidity and market-making are two other areas where there’s work to be done, he said.

“One of the things Interstellar is going to do is identify those gaps and step in and fill those voids,” Kennedy said.

In the bigger picture, Kennedy said he is a believer in “programmable money.”

“More and more, people don’t want to use paper money; they want to go to a digital form of money,” he said. “I think programmable money, digital assets and digital tokens are the future. They allow for faster, cheaper, more efficient money movement than the old traditional way of doing things.”

Interstellar also announced it is spinning out a new app-focused company called Pogo that will work to make mobile wallets interoperable. Adam Ludwin, the previous CEO of Interstellar and Chain, will lead the new firm.

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Digital currencies Digital payments Cryptocurrencies Money transfers Remittances Career moves Zelle