Bitcoin requires a Bretton Woods-style conference, suggests Cardano founder.
Hoskinson's Call for a Crypto-native Bretton Woods
Charles Hoskinson, the founder of Cardano, is pushing for a "crypto-native Bretton Woods," advocating for Bitcoin to serve as the anchor for an algorithmic stable-value system, completely detached from traditional banks and custodians. During a panel on Bitcoin-focused Decentralized Finance (DeFi), Hoskinson made it clear that he views any revival of traditional finance within the digital asset space negatively.
"Bitcoin exists because we had a contentious split from the legacy financial system post-2008. It wasn't a pleasant divorce," Hoskinson said. "Centralized stablecoins are like giving your kids to your ex for the weekend, and I despise the centralization of them. The banking industry is finding ways to creep back into crypto, bringing everything we tried to escape back with it."
Hoskinson believes that dollar-backed, centralized stablecoins contradict Bitcoin's roots. Instead, he champions algorithmic alternatives. Recalling his collaboration with Dan Larimer on BitUSD, an over-collateralized, on-chain dollar, Hoskinson said the project "showed the art of the possible." He also lauded the performance of Cardano's Djed, adding, "My dream is to have Bitcoin act as an algorithmic stablecoin, where Bitcoin itself acts as the collateral, similar to how the Bretton Woods agreement secured U.S. dollars with gold."
Hoskinson then emphasized the growing demand for tokenized real-world assets, such as property and intellectual property, among Bitcoiners. He suggested that non-custodial lending protocols, treating Bitcoin as untouched collateral, offer a viable solution: "We need to develop lending protocols that allow users to lend out Bitcoin, receive stablecoins, conduct transactions, earn yield, receive the yield back in Bitcoin, and return their Bitcoin. There's a path there."
A Looming Bitcoin Scarcity
Hoskinson predicted that a wave of institutional and sovereign accumulation over the next 24 to 36 months will escalate Bitcoin's scarcity significantly. The rising scarcity, coupled with aggressive demand, will trigger a shortage of Bitcoin, according to Hoskinson: "U.S. institutions and corporations will start buying Bitcoin, leading to unprecedented demand. This will result in a Bitcoin shortage."
In such a scenario, long-time Bitcoin holders might prefer leveraging their coins to evade capital gains tax, according to Hoskinson. Instead of selling their Bitcoin, holders would opt to lend it, earn tax-neutral yields, and live off Bitcoin as its value grows: "If you're that 10,000 BTC holder who bought under $1, you'd rather lend your coins and earn a yield, paying taxes on the yield, rather than incurring a massive capital gains tax bill at $120,000."
Hoskinson's monetary viewpoint is distinctly libertarian. Influenced by Ron Paul, he contrasts Bitcoin's engineered scarcity with the declining value of the U.S. dollar: "Our government's net savings are eroding by 8 to 10% every year. It's the biggest Ponzi scheme in human history to tolerate this. Bitcoin is the first hard money of my lifetime. We just need to fine-tune a few aspects for Bitcoin DeFi."
As Hoskinson's vision for Cardano's role in Bitcoin DeFi continues to unfold, it remains to be seen whether Bitcoin will adopt its own "Bretton Woods" system, according to Hoskinson. His goal remains clear: a hard money system, without compromise.
Currently, Bitcoin is trading at $104,960.
Editor's NotesAlthough the provided article mentions a "crypto-native Bretton Woods" and a reference to the original Bretton Woods agreement, there is no additional information about Hoskinson's plans for a Bitcoin-anchored algorithmic stable-value system in relation to the Bretton Woods agreement in the current available data. However, Hoskinson has been working on developing a privacy-focused stablecoin and exploring blockchain innovations and AI integration for Cardano. Below, you'll find a brief overview of these initiatives:
Hoskinson's Current Initiatives
- Privacy-Focused Stablecoin: Charles Hoskinson is working on creating a privacy-focused stablecoin on Cardano. This stablecoin aims to offer users cash-like confidentiality while ensuring regulatory compliance using a selective disclosure mechanism[3][4][5].
- Blockchain Innovation and AI Integration: Hoskinson is also pursuing the integration of artificial intelligence and privacy-focused sidechain technologies, such as Midnight, into Cardano's ecosystem. This vision includes expanding Cardano's presence in the DeFi space and increasing blockchain capabilities[1][2].
- Charles Hoskinson, as he pushes for a "crypto-native Bretton Woods," sees Bitcoin as a potential anchor in a decentralized finance (DeFi) system, suitable for investing in an algorithmic stable-value system unaffected by traditional banks and custodians.
- Hoskinson's vision for Bitcoin DeFi aspires to avoid reintroduction of traditional finance concepts into the digital asset space, believing that it contradicts Bitcoin's roots, while emphasizing the demand for tokenized real-world assets and non-custodial lending protocols that allow Bitcoin holders to earn yield without compromising control.
