Cardano’s Hoskinson Criticizes Wyoming’s Stablecoin Initiative
On February 4, 2025, during a live broadcast, Charles Hoskinson, the visionary behind Cardano and the CEO of Input Output Global (IOG), delivered a critical assessment of Wyoming’s state-backed stablecoin initiative. Hoskinson raised concerns about the hidden “freeze and seize” capabilities—which allow transaction reversals or prevention—suggesting they were excluded from the official product requirements documentation, thereby sidelining Cardano and other prominent blockchain platforms.
Concerns Raised Over Wyoming’s Transparency in Stablecoin Development
Hoskinson’s critique centers around the lack of openness in Wyoming’s stablecoin development process. He claims that the state did not provide a comprehensive product requirements document (PRD) detailing essential features like the ability to freeze or seize tokens under certain legal or regulatory conditions. The absence of this transparency, according to Hoskinson, not only hampers fair competition but also threatens user privacy and the broader adoption of blockchain technology.
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Allegations of Selective Disclosures
In his address, Hoskinson expressed frustration over Wyoming’s selective disclosure of criteria only after the fact. He alleged that companies were given less than five days to demonstrate compliance with the freeze-and-seize requirement. He argued that if the requirement had been clearly stated from the beginning, Cardano could have integrated such a feature in about two weeks.
The Advantages of Programmable Blockchains
Highlighting Cardano’s capabilities, Hoskinson compared programmable blockchains like Cardano and Ethereum with “fixed-function” ledgers such as XRP. Programmable chains allow developers to embed new features directly into smart contracts, making it possible to add a freeze-and-seize capability if needed.
“If a protocol doesn’t support something natively on Cardano or Ethereum, you write a smart contract,” Hoskinson elaborates. “Had we known freeze-and-seize was a hardline requirement, we could have developed a contract to meet it.”
Concerns Over Potential Bias and Lack of Public Engagement
Hoskinson implied that the selection process might have been orchestrated to favor a specific blockchain solution, hinting at a possible conflict of interest involving a decision-maker previously associated with the chosen platform. He emphasized the lack of open bidding or public dialogue regarding the stablecoin’s critical features.
Comparisons to Central Bank Digital Currencies (CBDCs)
Hoskinson criticized the notion that Wyoming’s stablecoin would resemble a central bank digital currency (CBDC) due to its freeze-and-seize functionality and transparent ledger. He warned that this setup compromises financial privacy, granting authorities—or even third parties—the ability to monitor and freeze transactions at will.
“Holding Wyoming’s stablecoin means every purchase is tracked,” Hoskinson cautioned. “At any point, your assets could be seized.”
Economic Viability Concerns
Hoskinson questioned the economic viability of Wyoming’s stablecoin, citing a limited budget of $5.8 million and a rapidly changing regulatory landscape. He compared this with established stablecoin issuers like Tether and Circle, which generate billions in revenue and can quickly adapt to regulatory changes, posing a challenge for a nascent state-backed project to gain market traction.
“Tether made $13 billion last year, and Circle made about the same,” he noted, emphasizing the intense competition. “With a $5.8 million budget, you’re essentially creating a CBDC in Wyoming.”
A Call for More Prudent Resource Allocation
Hoskinson suggested that Wyoming should consider “white labeling” an existing stablecoin infrastructure instead of building one from scratch. This approach could allow the state to negotiate a share of Treasury bill revenue or interest payments, potentially benefiting Wyoming without incurring significant development costs.
As a resident of Wheatland, Wyoming, Hoskinson framed his criticism as a defense of local taxpayers. He argued that public funds are at risk in a project that may not deliver significant benefits to the state’s residents. Had the PRD been openly accessible, particularly the freeze-and-seize requirement, Cardano and other platforms could have submitted proposals more aligned with the state’s goals.
“Wyoming’s workforce deserves better,” he asserted. “This isn’t how procurement should work.”
Hoskinson urged state officials and legislators to scrutinize the project more rigorously, emphasizing the importance of robust debate to determine if the stablecoin aligns with Wyoming’s pro-innovation image or inadvertently creates a centralized digital currency under federal oversight.
Current Market Status of Cardano
At the time of the broadcast, Cardano’s ADA was trading at $0.75.
