The creator of Cardano (ADA), Charles Hoskinson, warns that the collapse of US banks this year could trigger a repeat of the 2008 financial crisis.
In a new interview with Fox Business, the maker of the smart contract platform says the US banking model is wearing out as cryptocurrencies show resilience under difficult macroeconomic conditions.
“The [crypto] markets keep steady and stable. Overall, we are recovering since 2022 and the FTX crisis, and it will take a bit more time to resolve, but I’d rather be a crypto guy than a banker right now. Crypto is okay, banks not so much.”
Hoskinson says the banking model appears broken and warns that the US could face a similar financial crisis today as after the banks failed in 2008. those that have failed so far in 2023 have $540 billion in combined assets.
“In 2008, we had $373 billion in assets. I think we’re over $540 billion now just in the 2023 crisis alone. We’re just getting started. That whole business model falls apart if you give it a little 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 will happen is that ‘too big to fail’ will only lead to larger institutions. We saw this story in 2008. And this is the replay. I don’t think anyone wants to watch it.”
Hoskinson also says the United States is lagging behind other jurisdictions in adopting reasonable cryptocurrency regulations and risks losing crypto businesses to overseas countries. He notes that the European Parliament recently approved the Markets in Crypto-Assets Regulation (MiCA), which are rules for crypto operations in the European Union.
“However, if you increase the opening to global markets, people move on. The Europeans continue with MiCA. The Asians are moving on, and overall the global regulation of cryptocurrencies is getting better, especially in highly competitive jurisdictions like the GCC (Gulf Cooperation Council)…
What’s going to happen is we just have to focus on foreign countries 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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