Charles Hoskinson recorded a video entitled Legacy is Eating Crypto, lamenting that Bitcoin and Ether are falling by the wayside amid the popularity of stablecoins USDC and USDT. Dollar-backed stablecoins account for only about 10% of the cryptocurrency market, but dominate the volume of transactions on the network (about 70%).
The Cardano founder argues that this dominance centralizes control of the crypto space – given that stablecoins are backed by fiat currencies and are subject to jurisdiction-specific rules. This centralized influence could dictate the direction of DeFi, disrupting the decentralized nature of cryptocurrencies.
The solution to the problem may be algorithmic stablecoins, which operate independently of any central authority, governed by on-chain algorithms. Such tokens are more consistent with the philosophy of cryptocurrencies, Hoskinson is sure.
The founder of Cardano believes that due to spot Bitcoin exchange-traded funds (ETFs), Wall Street's influence on the cryptocurrency market is increasingly growing. A small group of wealthy individuals controlled by traditional financial institutions could theoretically exercise control over Bitcoin, Hoskinson says.
“We must be able to participate in markets without fear of censorship and external control. This is the core concept of cryptocurrencies, but it means nothing if we hand over control to traditional players,” concluded the Cardano founder.
Previously, Charles Hoskinson criticized the US Securities and Exchange Commission (SEC) for the fact that the agency does not consider Bitcoin a security, thereby giving Bitcoin “complete freedom of action”, unlike other cryptocurrencies.