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Founder of Cardano (ADA) says crypto world needs to move away from unstable and volatile banks

After the recent news about the three collapsed banks, the founder of Cardano (ADA) Charles Hoskinson said that for the crypto world to mature even more it needs to reduce the risk that unstable and volatile banks pour in.

There is only one way to grow the cryptocurrency ecosystem is to cut these ties, which only put at risk the system that has done nothing but grow so far.

The idea of Charles Hoskinson, founder of Cardano (ADA), to make the crypto world less volatile

The rise of cryptocurrencies has brought about a paradigm shift in the financial world, with blockchain-based digital assets offering a decentralized and secure alternative to traditional banking systems.

However, recent events have highlighted the need for the cryptocurrency ecosystem to become less dependent on unstable and volatile banks.

In a recent tweet, Charles Hoskinson, founder of crypto Cardano (ADA), called on the cryptocurrency industry to “disengage” from traditional financial institutions.

Hoskinson’s statement comes at a time when the macro-financial landscape remains turbulent, with the collapse of several well-known banks leading investors and depositors to follow risk-averse measures.

Hoskinson Idea

The idea behind Hoskinson’s appeal is to reduce the cryptocurrency industry’s dependence on traditional banks, which are often seen as centralized entities that hold significant control over the global financial system.

By reducing this dependence, digital assets can become more resilient and less vulnerable to the shocks and instability that can result from the failure of large financial institutions.

Moreover, Hoskinson’s statement is in line with the principles of decentralization, which is the very foundation of the crypto ecosystem. Decentralization is the process of removing intermediaries from transactions and creating a trustless peer-to-peer network.

By removing the risk of traditional banks, the cryptocurrency industry can further strengthen its decentralized nature and provide a more transparent and secure financial system.

Hoskinson’s call to action also highlights the need for greater regulatory clarity in the cryptocurrency sector. The lack of clear regulations has made it difficult for investors and users to fully understand the risks associated with digital assets.

By reducing dependence on traditional banks, the industry can potentially reduce regulatory uncertainty and provide more transparency to users and investors.

However, it is important to note that the process of de-risking will not happen overnight. Traditional banks continue to play a key role in the global financial system, and digital assets are still being accepted.

Therefore, a gradual approach to de-risking will be necessary, and the industry will have to work together to build a more robust and secure financial system.

The banking crisis is leading us more and more toward decentralized finance (DeFi)

Decentralized finance follows the same principle as distributed ledger technology (DLT) of cryptocurrencies.

It is going to eliminate the need for centralized financial intermediaries (banks, brokerage firms) and establish stable Peer-to-Peer (P2P) networks for secure transactions.

These transactions are one of the key factors of DeFi, independence from any centralized intermediary makes it an attractive alternative to the current financial system.

We are talking about a highly modern technology, capable of authorizing people with an internet connection, to participate directly in transactions.

DeFi is part of the blockchain, which makes it secure and impervious to any kind of counterfeiting.

Decentralized finance offers autonomy and functionality to its users with a set of tools that reduce the operational risks of banks and brokerage firms.

Its decentralized public blockchain governs every transaction within the industry, thus removing the cumbersome barriers of digital surveillance of transactions.

The Cardano Founder words

Therefore, according to Cardano‘s founder, one of the forefront possibilities of the crypto ecosystem is to move away from classic centralized finance.

In this way, the crypto world would become more stable and secure.

In the near future, the idea of decentralized finance being the basis for global transactions is being contemplated by many.

DeFi eliminates the financial bureaucracy of banks, the absence of strict regulations, makes it so that anyone with programming skills can interact with blockchain and innovate financial services. The legal constraints of banks do not allow this, but they also hinder many transactions across international borders.

A report dated 2021 by Gartner, explains that at least 20% of large financial organizations will switch to DeFi by 2024. But not only, Gartner analysts predict a prosperous future for decentralized finance (DeFi).

Will it be the next solution adopted by the crypto world?