Vladislav Sopov
As Cardano (ADA) strengthens its position in the stablecoin segment, Charles Hoskinson explains why algorithmic stablecoins matter
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- Charles Hoskinson on Algorithmic Stablecoins: “The Gold Standard of the Digital Age”
- Cardano (ADA) integrates various stablecoin designs
Charles Hoskinson, CEO and Founder of Input Output Global (IOG), is passionate about the concept of algorithmic stablecoins and believes it can undermine government monopoly over fiat money.
Charles Hoskinson on Algorithmic Stablecoins: “The Gold Standard of the Digital Age”
Hoskinson took to Twitter to share his views on algorithmic-backed stablecoins, i.e. cryptocurrencies pegged to fiat rates through intelligent contract-based technical designs.
The concept of algorithmic stablecoins is how we rid nation states of fiat currencies. It’s the gold standard of the digital age. Use a deflationary cryptocurrency like Bitcoin or Ada to back a stablecoin used as the national currency.
— Charles Hoskinson (@IOHK_Charles) December 2, 2022
Unlike traditional “centralized” stablecoins, the balance between collateral volume and stablecoin supply is not controlled by the stablecoin issuer. Instead, it relies on sophisticated on-chain tools.
It is the concept of an algorithmic stablecoin that can eliminate nation-state control over the issuance and circulation of fiat currencies. Adoption of this concept seems inevitable for Hoskinson as it is tantamount to a “gold standard” in the digital age.
To provide healthy collateral coverage, IOG CEO recommends using Bitcoin (BTC) and Cardano (ADA) as they are deflationary. BTC and ADA liquidity pools will protect stablecoins from falling in value.
Cardano (ADA) integrates various stablecoin designs
Therefore, over-collateralized stablecoins backed by Bitcoin (BTC) and Cardano (ADA) may replace national fiat currencies, Hoskinson predicts.
While some of its followers appreciated the idea, skeptics recalled that the design of the collapsed stablecoin TerraUSD (UST) looked the same.
As previously reported by U.Today, Cardano’s overcollateralized stablecoin Djed will go live on mainnet in January 2023. It will be equipped with its own payment system Djed Pay.
Another Cardano team, EMURGO, has launched a centralized regulated stablecoin USDA in partnership with Anzens.
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