Charles Hoskinson — the creator of major cryptocurrency Cardano (CRYPTO: ADA) — suggested the U.S. regulatory system and agencies are not ready to handle the crypto ecosystem and its implications.
What Happened: While talking via satellite phone from his private jet to the audience at the Financial Times Crypto and Digital Assets Summit, Hoskinson said the U.S. regulatory agencies have trouble managing cryptocurrencies' ability to change how they can be used, which would change how they should be categorized, according to a Friday Decrypt report.
He said "in the U.S., we do regulation by category, calling something a security, another thing is a commodity and something else is a currency. Then regulatory bodies are built around these categories that specialize in these areas.”
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Using Bitcoin (CRYPTO: BTC) as an example, Hoskinson said it can be used as a currency or a commodity not unlike gold — which makes it difficult for authorities to assign a label to this particular asset. He also raised concern about discrepancies in Environmental Social and Governance (ESG) scoring, noting there will be a difference in how different jurisdictions define those guidelines and smart contracts on a blockchain could be employed to build international ESG standards.
Hoskinson also said the blockchain provides "trust in business processes and install standards amongst people who don't really trust each other or necessarily get along." Bitcoin was the first application of this technology and enabled the direct value exchange between people who do not trust each other without a trusted third party using a system that no power can manipulate.
The smart contracts introduced by Ethereum (CRYPTO: ETH) — which Hoskinson co-founded — also enabled the easy creation of systems, not just assets, that "are not influenced by the politics of the day or the geopolitics of large nations over smalls nations."
Hoskinson concluded by pointing out that blockchains are nothing more than code and that code "doesn't care who you are or where you are at," highlighting the neutrality of such systems.