Cardano founder Charles Hoskinson addressed why American regulators are struggling to deal with cryptocurrency at a recent event.
On Wednesday, Cardano founder Charles Hoskinson addressed guests at the Financial Times Crypto and Digital Assets Summit via satellite phone from the comfort of his private plane.
During his speech, he singled out the United States’ regulatory framework as being unprepared to deal with the revolutionary nature of cryptocurrencies.
He also stated that the numerous institutions that govern financial markets in the United States are not equipped for crypto assets.
Part of the challenge for these organizations stems from cryptocurrencies‘ unique flexibility to change how they can be used and, thus, classified.
Hoskinson said; “In the United States, we regulate by category, designating one thing as security, another as a commodity, and yet another as a currency. Then regulatory entities that specialize in certain areas are formed around these categories.”
Using Bitcoin as an example, he emphasized that it can be viewed as money, as evidenced by its legal tender status in El Salvador, or as a commodity, similar to gold.
This makes it difficult for authorities to categorize and so control the asset.
He was then challenged to persuade the audience of the advantages of a decentralized world.
Using blockchain to tackle ESG standards
The Cardano founder used the chance to criticize the disparities in ESG norms set by the world’s rival, centralized authorities.
“If we look at ESG scoring, which every firm is talking about, how do we be more environmentally friendly, sustainable, and have excellent governance?” he questioned.
Hoskinson contends that each state will have a distinct standard for determining who gets to define ESG.
As a solution, he proposed blockchain technology. Using this technology, smart contracts might be used to construct transnational norms that broker trust and authority.
This, he believes, has a higher chance of fixing global warming and climate change than the current system.
From Bitcoin to smart contracts
Hoskinson, whose voice was garbled owing to the inconsistent satellite connection, claimed that the technology underlying crypto will give innate and immutable confidence in business processes and install norms amongst individuals who don’t really trust each other or necessarily get along.
The first use of this came in 2009, with the introduction of Bitcoin and decentralized monetary exchange.
Satoshi Nakamoto’s invention enabled peer-to-peer value exchange that could not be manipulated by dominant organizations.
Smart contracts on Ethereum, of which Hoskinson was also a co-founder, expanded on this concept, enabling decentralized systems that are “not impacted by the politics of the day or the geopolitics of major governments over little nations.”
He emphasized that blockchain protocols are just code and that the code “doesn’t care who you are or where you are.”
The code just does the job.
