Charles Hoskinson, founder of Cardano and head of Input-Output Global (IOG), took to X, formerly Twitter, to criticize the United States’ economic policies and handling of emerging technologies. His comments came after Fitch Ratings downgraded US debt from triple-A to AA+ on August 1.
Hoskinson pointed out the national debt of over $30 trillion and the challenges consistent budget deficits pose. He also highlighted the issues with doubling the country’s money supply within 24 months.
Moreover, Hoskinson raised concerns about the United States losing its competitive advantage in emerging technologies, especially in crypto, due to the Securities and Exchange Commission’s (SEC) aggressive regulatory stance, which he claimed stifled innovation in the sector.
Unlike other jurisdictions, including the UAE and Japan, the United States has been slow to formulate fitting laws to enable the growth of crypto and its instruments.
Hoskinson criticized the government’s attempt to raise energy costs and appeared bewildered at Treasury Secretary Janet Yellen’s apparent “lack of understanding regarding the credit downgrade.” He implied that despite recent drops in inflation rates and buoyant job markets, the United States is facing economic problems that indicate a decline.
The US credit rating was downgraded due to concerns about the country’s debt and governance standards. Fitch also raised alarms about the nation’s “recurrent debt limit debates and last-minute resolutions.”
Secretary Yellen expressed confusion about the downgrade, citing the nation’s economic strength. However, Hoskinson remains skeptical, highlighting the US’s ongoing struggles.
While significant, the downgrade does not immediately threaten the US’s status as a haven for investors. However, it could signal a decline in the country’s global financial reputation and potentially impact various sectors, including crypto.
Cardano’s native currency, ADA, has been under pressure in recent months amid a broader sell-off in crypto. ADA has been on a downtrend, edging lower and tracking Bitcoin, which is also dropping after peaking at around $31,800 in late July 2023.
ADA, among other mainstream currencies like ALGO, was mentioned as an example of unregistered security when the SEC sued crypto exchanges Binance and Coinbase, triggering a sharp sell-off. Despite attempts by IOG to enhance security, ADA is under pressure and has dropped below $0.30.
Hoskinson has defended Cardano against claims of being a “ghost chain,” reiterating its technological advancements and ongoing development efforts. Cardano is one of the most decentralized proof-of-stake networks with over 2,900 stake pool operators (SPO).
Moreover, in the current Basho stage, IOG developers aim to enhance the network’s performance and bolster scalability.
Feature image from Canva, chart from TradingView
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