With just $31 million in stablecoins against $356 million in total value locked, Cardano’s founder has proposed unprecedented treasury diversification into Bitcoin and native dollar-pegged assets to boost the network’s decentralized finance and stablecoin ecosystem.
On June 12, Cardano co-founder Charles Hoskinson proposed the idea in a YouTube video of swapping $100 million worth of Cardano (ADA) tokens for Bitcoin (BTC) and native stablecoins USDM and USDA to strengthen the ecosystem.
Hoskinson framed the treasury overhaul as a strategic bet on Cardano’s future as a multi-asset financial ecosystem. Drawing inspiration from sovereign wealth funds in Norway and Abu Dhabi, he argued that converting a portion of ADA’s treasury into yield-generating assets would unlock liquidity and signal serious confidence to institutional players.
A strategic fix for Cardano’s liquidity imbalance
In his remarks, Hoskinson addressed the stark disparity between Cardano’s treasury composition and its decentralized finance ambitions. His argument stemmed from what he termed Cardano’s “stablecoin drought”, a glaring imbalance that’s stifling development.
“We have a treasury with about $1.5 billion of ADA, and yet there’s only about $30 million of stablecoins in the entire Cardano ecosystem,” he said. “That’s a problem.”
For context, while Ethereum boasts $190 in stablecoins for every $100 of TVL, Cardano lags far behind with just $9. “This isn’t just lagging behind; it’s choking our ecosystem,” Hoskinson argued.
According to him, the proposed conversion aims to boost stablecoin reserves by targeting a 33% to 40% stablecoin-to-TVL ratio and to prime Bitcoin-focused decentralized finance by allocating $25 million to $50 million to Bitcoin to attract yield-seeking holders. Hoskinson also believes the move could improve the chances of Cardano-native stablecoins being listed on tier-two and tier-three exchanges.
While some traders on X voiced concern that liquidating $100 million in ADA would crash the market, Hoskinson dismissed the skepticism with a chuckle, claiming, “ADA’s liquidity can swallow this without a 1% price blip.”
He emphasized that the proposed treasury shift wouldn’t be a reckless exchange dump but a carefully managed operation using time-weighted average price algorithms and over-the-counter desks, the same tools institutional players use to quietly shift nine-figure positions. “This isn’t some meme coin we’re talking about,” he stressed.
Whether the move turns Cardano into a decentralized finance powerhouse or backfires depends largely on timing and sentiment management.