Cardano founder Charles Hoskinson says the fifth-largest crypto asset is poised to be at the center of one of the greatest wealth transfers in history.
In a new video, Hoskinson tells his 119,000 subscribers that he’s looking at Kiva, a platform that allows borrowers across 77 countries to secure microloans, as an inspiration for Cardano’s future.
“And I think to myself for me the moment I know that Cardano has truly made a difference and changed the world is if I can open up an application just like I do Kiva at the moment and I can have a direct relationship with someone somewhere in the world who is not doing so well and I can actually give them not as a gift, not as charity, but a loan to them and they pay me back and I can do that again and again and again and I win more than I lose. That to me would mean success for Cardano.“
The IOHK CEO explains that a number of factors must come together before Cardano can facilitate microloans to people all over the world in need of capital.
“So much has to happen for us to get to that moment. You have to build an identity system. We have to make sure that metadata system is where it needs to go. There’s needs to be a proper payment system that can work in all places, including these areas with intermittent internet.
With identity, you have to have reputation. You have to have social structures formed. You have to be able to give them an asset in that jurisdiction they live that they can spend as if it was the local currency. So, stablecoins have to form. Then you have to actually get paid back and be able to profit from that, make it a recurring circle. If that’s possible, everything is possible.”
Once the lending and borrowing ecosystem is in place, Hoskinson believes that Cardano will be the smart contract platform that moves wealth from a negative interest rate environment to countries that show potential for growth.
“And because the interest rates could be higher than what we see in the negative interest rate world and what we see in America, corporations will use this mechanism as a treasury management function, either directly or through structured financial products.
What does that mean? That alone means we will witness one of the greatest wealth transfers in human history, from the developed rich world to the developing not so rich world not because of charity but because it makes business common sense.”
Hoskinson highlights that the next step would be to create security tokens that enable micro IPOs (initial public offerings) in countries where the cost of running a business is relatively low.
“The cost of running a business in Ethiopia is 10 to 50 times less than the cost of running a business in San Francisco, and it doesn’t necessarily equate to 10 to 50 times less profit. That’s the key. A whole new world opens up once this infrastructure is in place.“
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Featured Image: Shutterstock/Tiziano Cardaci