Charles Hoskinson, the creator of Cardano (ADA), has raised concerns about the possibility of another financial crisis similar to the one experienced in 2008. He claims that traditional banking models are becoming increasingly outdated, while cryptocurrencies have demonstrated resilience in the face of challenging macroeconomic conditions.
Hoskinson recently spoke with Fox Business, highlighting the differences between the current banking landscape and the thriving crypto market. He stated that the combined assets of failed banks in 2023 amount to $540 billion, compared to $373 billion during the 2008 crisis. He also warned that the banking business model is crumbling, with events such as the failure of Silicon Valley Bank exacerbating the situation.
Hoskinson expressed concerns that the “too big to fail” mentality could lead to even larger financial institutions, as was the case after the 2008 crisis. He also criticized the US for lagging behind other regions in implementing reasonable cryptocurrency regulations, citing the European Parliament’s recent approval of the Markets in Crypto-Assets Regulation (MiCA) as an example of progress.
Hoskinson cautioned that the US risks losing crypto companies to other countries with more favorable regulatory environments, such as those in the Gulf Cooperation Council (GCC). As the global regulatory landscape for cryptocurrencies improves, Hoskinson believes the focus will shift to jurisdictions outside of the US, which could negatively impact the nation’s economy and national security.
Hoskinson’s warnings come at a time when the crypto industry is facing increased scrutiny from regulators and policymakers worldwide. In the US, the Securities and Exchange Commission (SEC) has recently intensified its enforcement actions against crypto companies, and there is ongoing debate about how to regulate the industry effectively without stifling innovation.
Hoskinson’s comments highlight the need for a more innovative and sustainable financial system. As the crypto industry continues to evolve, it will be essential for regulators and policymakers to strike a balance between protecting investors and fostering innovation. If the US fails to keep up with regulatory developments in other jurisdictions, it risks falling behind in the global race for economic growth and prosperity.
