Charles Hoskinson, CEO and Founder of Input Output Global (IOG) is excited about the concept of algorithmic stablecoins and confident that it can undermine governments’ monopoly on fiat money.
Charles Hoskinson on algorithmic stablecoins: “Gold standard of the digital age.”
Hoskinson took to Twitter to share his views on algorithmic-backed stablecoins, i.e., H. Cryptocurrencies pegged to fiat rates using smart contract-based technical designs.
Unlike traditional “centralized” stablecoins, the balance between collateral volume and stablecoin supply is not controlled by the stablecoin issuer. Instead, it relies on sophisticated in-chain instruments.
The concept of an algorithmic stablecoin can eliminate nation-state control over the issuance and circulation of fiat currencies. Adopting this concept seems inevitable to Hoskinson, as it is equivalent to a “gold standard” in the digital age. To provide healthy collateral, the 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) onboards various stablecoin designs
Hoskinson says over-collateralized stablecoins backed by Bitcoin (BTC) and Cardano (ADA) could replace national fiat currencies. While some of his supporters appreciated the idea, skeptics recalled that the design of the collapsed stablecoin TerraUSD (UST) looked the same.
As previously reported, Cardano’s overcollateralized stablecoin Djed is set to launch on the mainnet in January 2023. It will be equipped with its payment system Djed Pay. Another Cardano team, EMURGO, has launched a centrally regulated USDA stablecoin in partnership with Anzacs.