Charles Hoskinson, the founder of Cardano, recently clarified the situation regarding the absence of popular stablecoins like USDC and USDT on the Cardano network. He debunked the common misconception that this is due to bad blood or refusal to pay fees.
The Real Reason: It’s All About DeFi
Hoskinson explained that the issue boils down to Cardano’s current stage of development. Stablecoin issuers like Circle and Tether primarily consider the Total Value Locked (TVL) and the overall health of a network’s decentralized finance (DeFi) ecosystem before integrating. Cardano’s TVL is significantly lower than that of Ethereum or Solana, making integration less attractive for these companies right now.
He recounted a past proposal from Circle in 2021 that Cardano declined, highlighting the lack of sufficient DeFi activity at the time. He also revealed that stablecoin providers often request substantial pre-minted stablecoins (in the hundreds of millions of dollars) to justify the integration effort – a significant investment for Cardano at its current stage.
It’s Not Personal, It’s Business
Hoskinson emphasized that there’s no animosity between Cardano and these companies. The decision is purely a business one based on market dynamics. He stressed that simply adding USDC and USDT won’t magically boost Cardano’s DeFi; a thriving DeFi ecosystem naturally attracts stablecoins, not the other way around. He used Algorand as an example, where a large USDC minting initiative had minimal impact on its DeFi growth.
The Cardano Plan: Building from Within
Hoskinson outlined Cardano’s strategy to organically attract stablecoins:
- Focus on Internal Growth: The priority is to build a robust Cardano DeFi ecosystem.
- Sovereign Wealth Fund: A proposed Cardano sovereign wealth fund aims to inject initial liquidity, starting with $100 million. Details will be released at Rare Evo.
- Bitcoin DeFi as a Catalyst: Leveraging Cardano as a stablecoin platform for Bitcoin and Lightning Network users could organically attract major stablecoin providers like Circle and Tether.
Hoskinson concluded by criticizing the oversimplification of the situation on social media, where the narrative often boils down to blaming either him or the companies for the lack of integration. He stressed that building a strong foundation is key, and that strategic negotiations are best conducted from a position of strength. Currently, that means focusing on building a thriving DeFi ecosystem.
At the time of writing, ADA was trading at $0.5899.