The founder of Cardano (ADA) returns to crypto
Following the latest news of the three collapsed banks, Cardano (ADA) founder Charles Hoskinson said that for the crypto world to mature even more, it needs to reduce the risk of unstable and volatile banks pouring in.
There is only one way to grow the cryptocurrency ecosystem is to cut these ties, which only endangers the system that has done nothing but grow so far.
The brainchild of Charles Hoskinson, founder of Cardano (ADA), to make the crypto world less volatile
The rise of cryptocurrencies has led to a paradigm shift in the financial world, with blockchain-based digital assets offering a decentralized and secure alternative to traditional banking systems.
However, recent events have highlighted the need for the cryptocurrency ecosystem to become less dependent on unstable and volatile banks.
In a recent tweet, Charles Hoskinson, founder of crypto Cardano (ADA), urged the cryptocurrency industry to “free itself” from traditional financial institutions.
Crypto must remove the risk from the unstable and volatile banks
— Charles Hoskinson (@IOHK_Charles) March 15, 2023
Hoskinson’s statement comes at a time when the macro-financial landscape remains turbulent, with the collapse of several well-known banks prompting investors and depositors to pursue risk-averse measures.
Hoskinson idea
The idea behind Hoskinson’s appeal is to reduce the cryptocurrency industry’s reliance on traditional banks, which are often seen as centralized entities that have significant control over the global financial system.
By reducing this dependence, digital assets can become more resilient and less vulnerable to shocks and instability that can result from the failure of large financial institutions.
Moreover, Hoskinson’s statement is in line with the principles of decentralization, which is the very foundation of the crypto ecosystem. Decentralization is the process of removing intermediaries from transactions and creating a trustless peer-to-peer network.
By de-risking traditional banks, the cryptocurrency industry can further strengthen its decentralized nature and provide a more transparent and secure financial system.
Hoskinson’s call to action also highlights the need for greater regulatory clarity in the cryptocurrency sector. The lack of clear regulations has made it difficult for investors and users to fully understand the risks associated with digital assets.
By reducing reliance on traditional banks, the industry can potentially reduce regulatory uncertainty and provide more transparency to users and investors.
However, it is important to note that the process of de-risking will not happen overnight. Traditional banks continue to play a key role in the global financial system, and digital assets continue to be accepted.
Therefore, a gradual approach to risk mitigation will be necessary, and the industry must work together to build a more robust and secure financial system.
The banking crisis is leading us more and more towards decentralized finance (DeFi)
Decentralized finance follows the same principle as the distributed ledger technology (DLT) of cryptocurrencies.
It will eliminate the need for centralized financial intermediaries (banks, brokerage firms) and establish stable Peer-to-Peer (P2P) networks for secure transactions.
These transactions are one of the key factors of DeFi, independence from any centralized intermediary makes it an attractive alternative to the current financial system.
We are talking about a very modern technology, which is able to authorize people with an internet connection to participate directly in transactions.
DeFi is part of the blockchain, making it secure and impervious to any form of counterfeiting.
Decentralized finance offers autonomy and functionality to its users with a set of tools that reduce the operational risk of banks and brokerage firms.
Its decentralized public blockchain governs every transaction in the industry, thereby removing the cumbersome barriers to digital monitoring of transactions.
Cardano founder words
Therefore, according to Cardano’s founder, one of the prime opportunities for the crypto ecosystem is to move away from classical centralized finance.
In this way, the crypto world would become more stable and secure.
In the near future, the idea of decentralized finance being the basis of global transactions is being considered by many.
DeFi eliminates the financial bureaucracy of banks, the absence of strict regulations, makes it possible for anyone with programming skills to interact with blockchain and innovate financial services. The banks’ legal restrictions do not allow this, but they also prevent many transactions across international borders.
A report dated 2021 by Gartner explains that at least 20% of large financial organizations will switch to DeFi by 2024. But not only that, Gartner analysts predict a prosperous future for decentralized finance (DeFi).
Will it be the next solution adopted by the crypto world?
