Cardano founder Charles Hoskinson’s proposal aims to balance user privacy with regulatory compliance by limiting public visibility while providing access to authorized entities under legal directives.
The proposed stablecoin could leverage Cardano’s Midnight sidechain project, known for its privacy-focused infrastructure.

The founder of Cardano, Charles Hoskinson, announced early plans to develop a stablecoin equipped with much better privacy features. In an episode of Conversations with Leaders podcast, Hoskinson expressed an interest in developing a stablecoin that would not make user transactions visible to the public ledger as is in the case with current stablecoins where users benefit from total transactional visibility.

Cardano’s Charles Hoskinson Shares Plans On Privacy Stablecoins

According to Hoskinson, most stablecoins out there expose everything happening on the blockchain, and this may be a turn-off to users who want to enjoy financial privacy. He was reasoning that some customers would prefer discretion in transactions and may not feel comfortable using stablecoins that track and post all details, including recipients and amounts.

To answer these worries during the podcast, Hoskinson presented the notion of “selective disclosure and season freeze regime.” For further context, this is a mechanism that would filter the transaction data to the general public. But, it would still be accessible by regulated entities under the provisions of court orders or official directives.

He theorized that this structure could accommodate the privacy considerations of users in addition to regulatory frameworks without compromising the general integrity of the stablecoin. Supporting this initiative is one of the technological pillars, that is, Cardano’s sidechain project, Midnight.

Privacy-focused Midnight could be used as the basis for bringing this new-generation stablecoin to life. Based on Hoskinson’s description, Cardano is a solid candidate to take the forefront of privacy-preserving financial assets in the blockchain because of its integration of selective disclosure with Midnight’s infrastructure.

Although the idea itself is still at the discussion stage, the general environment of the stablecoin market gives this development particular importance. The market has rapidly grown and achieved an overall valuation of more than $245 billion. Superstars such as USDT and USDC control the space and are based predominantly around Ethereum, Solana and Tron.

Cardano is however, new in the stablecoin environment. Nonetheless, it already has DJED, USDA, and USDM, the total market capitalization for the three stands at just below $32 million, according to DeFiLlama.

Stablecoin Regulatory Restraints & Implications

Today, the stablecoin transactions for all the platforms, including Cardano, keep the transactions transparent. However, Hoskinson’s suggested model is set to alter that as it presents the users with an alternative that does not infringe on legal oversight while establishing transactional privacy.

The announcement also comes in the midst of regulatory pressures on privacy-driven cryptocurrencies. Such projects in the form of Monero and Zcash have received exchange rejections by major exchange bodies over concerns of illicit use. The European Union has also been tough and new rules that prohibit the usage of privacy coins and anonymous wallets in regulated exchanges will start in July 2027.

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Filed under: Bitcoin - @ May 15, 2025 6:16 pm