Charles Hoskinson, co-founder of the Cardano network, announced intentions to launch the world’s first private stablecoin, which has the potential to significantly change the cryptocurrency market. According to him, the new asset will ensure transaction privacy, similar to cash, marking an important step in the development of blockchain technology.
This is reported by Business • Media
Hoskinson noted that “perhaps people do not want a stablecoin where every purchase is tracked forever by everyone everywhere.”
“Privacy can be maintained without losing compliance with regulatory requirements.”
According to DeFiLlama, the market capitalization of stablecoins currently stands at around $243 billion. Currently, there are stablecoins on the Cardano platform with a total market volume of $31.47 million, but none of them have privacy features.
Despite the importance of privacy for the crypto community, regulators, particularly the European Union, are increasingly tightening control over projects that provide anonymity. Starting from July 2027, a ban is planned for exchanges on dealing with private cryptocurrencies like Monero and Zcash. This is driven by concerns over money laundering.
At the beginning of 2024, the Binance exchange labeled Monero and Zcash as high-risk assets, and in February, it ceased financial transactions with XMR. Meanwhile, the crypto service Kraken stopped supporting the XMR token in Ireland and Belgium starting June 2024.
Hoskinson believes that it is possible to combine privacy with compliance through the implementation of a stablecoin with selective data disclosure, allowing regulators to access information only in cases related to offenses such as terrorism financing.
Some projects, such as Firo and Zcash, have already attempted to implement similar solutions, but they failed to convince regulators, leading to a decrease in their liquidity.
Classic stablecoins are also facing challenges. Recently, a bill to regulate stablecoins (GENIUS Act) did not pass in the U.S. due to Democrats expressing concerns over risks to consumers and financial stability.
In this context, Cardano’s initiative appears to be an attempt to offer an alternative that will protect user rights while complying with legal requirements. The CEO of the analytical crypto platform CryptoQuant, Ki Young Ju, also predicts the emergence of “dark” stablecoins that will be independent of government control.