Charles Hoskinson, the CEO of Input Output Global (IOG), who founded Cardano (ADA), has resounded his faith in algorithmic stablecoins, stating that they are the most essential research stream for Bitcoin (BTC), the largest cryptocurrency by market cap, to fully realize its original vision.
Hoskinson’s comment comes in the wake of the embattled Silvergate and Silicon Valley Bank (SVB) fiasco, which has initiated the de-pegging of USD Coin (USDC). At the time of writing, USDC is priced at $0.9132.
Charles Hoskinson tweeted, “I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin. Banks will always let you down as long as they are fractional reserve.”
I still firmly believe that algorithmic stablecoins long term are the most essential research stream to fully realize the original vision of Bitcoin. Banks will always let you down as long as they are fractional reserve. https://t.co/zeQVSzhuaI
— Charles Hoskinson (@IOHK_Charles) March 11, 2023
Cardano creator was responding to a tweet by the Kraken CEO, Jesse Powell, who hinted that the market might be losing faith in the financial products that are based in the United States following USDT and USDC’s loss of the dollar peg earlier today.
It’s worth noting that Circle, the issuer of USDC, has made it known that 3.3 billion of its total $40 billion in USDC reserves is domiciled in the embattled Silicon Valley Bank.
Read Also: Cardano Developers Launch New Toolkit Supporting Ethereum-Compatible Sidechains
What is an Algorithmic Stablecoin
An algorithmic stablecoin is a crypto asset whose value is supported by another crypto asset designed to maintain a stable price.
It can also be referred to as a type of crypto asset that relies on two types of digital tokens: a stablecoin and another digital asset supporting the stablecoin earlier mentioned. This implies that the algorithm or smart contract governs the relationship between them.
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