In a recent interview, the founder of Cardano and co-founder of Ethereum, Charles Hoskinson, described the emergence of Facebook’s planned virtual currency ‘Libra’ as signposting the erosion of the centralized legacy financial system in the face of increasing global adoption of distributed ledger technologies.
Hoskinson asserts that the current mainstream financial order as having emerged from the Bretton Woods Agreement of the 1940s, describing such as a “semi-stable system” that has dominated “the free world for nearly eighty years.”
Hoskinson states that said prevailing financial order is now “coming to an end out of necessity,” asserting that “2008 was the last milestone for the legitimacy of [the current] system.”
Cryptocurrencies Comprise “Threat to Sovereign Currencies”
Describing the prevailing financial order’s reaction to cryptocurrency as having been “first they ignore you, then they laugh at you, then they fight you,” Hoskinson asserts that “we have gotten to the point where regulators are really starting to realize that cryptocurrencies are a threat to sovereign currencies, they are a threat to the way that the financial order has been constructed.”
For Hoskinson, the emergence of Libra comprises the “Sputnik moment” in relation to the virtual currency ecosystem – the event that triggers “a global awakening [that is] telling politicians, ‘this financial order that you’re used to is ending, and whether you like it or not, things are changing’.”
The Cardano founder asserts the cryptocurrency ecosystem comprises “a conversation about where the world’s financial system needs to go in every respect,” including property rights, transfers, regulation, and globalization, adding that, through Libra, Mark Zuckerberg has “forced the issue on everybody.”
Cryptocurrencies as Driving Shift in Organization of Global Economic Activity
For Hoskinson, the shifting financial dialectic comprises “an opportunity for us to build a truly global system that is fair. Where everybody has equal access – where the billionaire and the farmer basically have access to the same system for the first time in human history.
It’s a system that no-one controls, and no-one can manipulate to gain an unfair financial advantage.”
Despite believing that the transition period will “take decades [to] eventually settle,” Hoskinson expressed his “firm” belief that “our side will win, the cryptocurrency side, the side that believes in decentralization, the side that believes in pushing power to the edges,” adding
Because the alternative would be, you would have to pick a standard, you’d have either say the United States is going to be in control for another century, or China is going to be in control, or some federation of nation-states are going to be in control, and then that means that there’s winners and losers, and some group of people will win big and be able to build vast empires from it, and the vast majority of people lose.
Hoskinson asserts that there is “no reason for that win-lose, we can [a] have win-win. America can be just a rich and just as powerful if it didn’t have the dollar. […] It would have to have a different economy, it would have to have a different monetary policy, it would have to have different fiscal policy, it would have to live within its means and actually not have massive deficit spending, but it can still be a great nation and achieve great things, […] and the world could be far more peaceful. Or we can think it’s ‘us’ versus ‘them’.”