Cardano (ADA) creator Charles Hoskinson is warning that this year’s collapse of US banks could cause a repeat of the 2008 financial crisis.
In a new interview with Fox Business, the creator of the smart contract platform says that the US banking model is wearing thin as cryptocurrencies show resiliency under tough macroeconomic conditions.
“The [crypto] markets are holding steady and stable. Overall, we’ve been recovering since 2022 and the FTX crisis, and it’s going to take a little bit more time for it to clear out, but I’d rather be a crypto guy than a banker right now. Crypto is okay, banks not so much.”
Hoskinson says that the banking model appears broken and he warns that the US may face a similar financial crisis today that it suffered after banks failed in 2008. He notes that the banks that failed in 2008 had a combined $373 billion in assets, while the banks that failed so far in 2023 have $540 billion in combined assets.
“In 2008, we had $373 billion in tied up assets. I think we’re over $540 billion now just in the 2023 crisis. We’re just getting started. That whole business model is falling apart when you give it a little bit of a push and then you lose these institutions like SVB (Silicon Valley Bank) and they get so politicized and they get so globalized…
So it’s nice to be in crypto land where things are simple and pure and you can just focus on building…
What’s going to happen is ‘too big to fail’ is just going to lead to bigger institutions. We’ve seen this story in 2008. And this is the rerun. I don’t think anybody wants to watch it.”
Hoskinson also says that the United States is falling behind other jurisdictions in adopting reasonable cryptocurrency regulations and runs the risk of losing crypto companies to countries overseas. He notes that European Parliament recently approved the Markets in Crypto-Assets Regulation (MiCA), which are rules for crypto operations in the European Union.
“If you widen the aperture for the global markets, though, people are moving on. The Europeans are moving on with MiCA. The Asians are moving on, and, overall, the global regulatory environment for cryptocurrencies is getting better, especially in very competitive jurisdictions like the GCC (Gulf Cooperation Council)…
What’s going to happen is we’re just going to have to focus abroad when there’s uncertainty in the United States, and that’s to the detriment of our national security and our economy as a whole.”
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