As Cardano (ADA) strengthens its position in stablecoin segment, Charles Hoskinson explains why algorithmic stablecoins matter
Charles Hoskinson, CEO and founder of Input Output Global (IOG), is excited by the concept of algorithmic stablecoins and believes it can undermine states’ monopoly on fiat money.
Charles Hoskinson on algorithmic stablecoins: “Gold standard of digital age”
Hoskinson took to Twitter to share his views on algorithmically-backed stablecoins, i.e., cryptocurrencies that are pegged to fiat rates by smart contract-based technical designs.
Unlike traditional “centralized” stablecoins, the balance between collateralized volume and the stablecoin supply is not controlled by the issuer of the stablecoin. Instead, it relies on sophisticated on-chain tools.
It is the concept of an algorithmic stablecoin that can remove the control nation states have over the issuance and circulation of fiat currencies. The adoption of this concept looks inevitable to Hoskinson, as it is equal to a “gold standard” in the digital age.
To create healthy collateral support, the IOG CEO recommends using Bitcoin (BTC) and Cardano (ADA) as they are deflationary. The BTC and ADA Liquidity Pool will protect the stablecoin from losing value.
Cardano (ADA) onboards various stablecoin designs
As such, overcollateralized stablecoins backed by Bitcoin (BTC) and Cardano (ADA) can replace national fiat currencies, Hoskinson foresees.
While some of his followers applauded the idea, skeptics recalled that the design of the collapsed TeraUSD (UST) stablecoin looked exactly the same.
As covered by U.Today previously, Cardano’s overcollateralized stablecoin Djed will go live on the mainnet in January 2023. It will be equipped with its own payment system Djed Pay.
Another Cardano team, EMURGO, has launched USDA, a centralized regulated stablecoin in partnership with Anzens.
