TLDR
- Hoskinson proposes converting $100M in ADA to Bitcoin and stablecoins to fix liquidity gaps and boost DeFi growth.
- A $100M diversification plan may solve Cardano’s stablecoin shortage and attract institutional capital.
- Cardano may reallocate treasury funds into BTC and USDM to improve stablecoin-to-TVL ratio and DeFi utility.
- Cardano’s $1.5B treasury may fuel a major liquidity shift, fixing the network’s low stablecoin presence.
- Hoskinson pushes for DeFi expansion via treasury deployment, while Cardano Foundation urges regulatory caution.
Cardano may convert $100 million worth of ADA into Bitcoin and native stablecoins to strengthen its DeFi and liquidity landscape. The proposal aims to address the network’s limited stablecoin supply and foster long-term adoption. This strategy is part of broader efforts to position Cardano as a multi-asset financial platform.
ADA to Bitcoin and Stablecoin Diversification Strategy
Cardano co-founder Charles Hoskinson outlined a plan to reallocate treasury funds into Bitcoin and Cardano-based stablecoins like USDM and USDA. The move targets a 33% to 40% stablecoin-to-TVL ratio, aiming to resolve Cardano’s liquidity imbalance. This decision stems from Cardano’s current ratio of just 9% stablecoins against total value locked.
CHARLES HOSKINSON SUGGESTS SWAPPING $100M $ADA FROM THE CARDANO TREASURY FOR $BTC AND STABLECOINS TO BOOST DEFI AND STABLECOIN ECOSYSTEM
— The Wolf Of All Streets (@scottmelker) June 13, 2025
Cardano currently holds around $1.5 billion in ADA reserves, yet stablecoin liquidity remains underdeveloped across the network’s DeFi protocols. This diversification could unlock capital, attract institutional users, and increase adoption of Cardano-native assets. It may also provide non-inflationary income through yield-generating assets like Bitcoin.
The plan includes using institutional trading tools such as OTC desks and time-weighted average price algorithms to avoid price shocks. Hoskinson emphasized that ADA has enough liquidity to support the move without disrupting the market. The intention is to avoid speculative volatility and reinforce Cardano’s financial stability.
Stablecoin Deficit Threatens Ecosystem Growth
Cardano’s ecosystem is facing a significant stablecoin shortfall that limits its DeFi expansion and competitive positioning. Data from DefiLlama shows only $31 million worth of stablecoins minted on-chain, despite a $356 million total value locked. In comparison, Solana has $11 billion in stablecoins against nearly $10 billion in TVL.
Hoskinson argued that the network must correct this imbalance to remain competitive in the layer-one blockchain space. By boosting stablecoin issuance, Cardano aims to improve user experience across lending, borrowing, and liquidity provisioning. The increased liquidity may also enhance access to Cardano tokens across tier-two and tier-three exchanges.
He believes the new allocation strategy will help reduce friction and improve capital efficiency in Cardano’s DeFi protocols. Stablecoin availability remains a crucial requirement for users and developers building financial applications. The proposal aligns with Cardano’s roadmap toward scalable and institution-ready infrastructure.
Leadership Debate Reflects Strategic Tensions
The proposal has exposed contrasting views between Cardano’s founding leadership and its foundation’s current executive team. While Hoskinson favors aggressive treasury deployment for growth, Cardano Foundation CEO Frederik Gregaard downplays TVL as a key metric. Gregaard focuses instead on regulatory compliance and enterprise-grade solutions.
This difference in approach highlights a broader debate about how to measure progress and sustainability in blockchain ecosystems. Some stakeholders prioritize TVL and liquidity, while others emphasize institutional adoption and governance. The outcome of this debate could influence future treasury management decisions.
Cardano’s community and governance mechanisms must approve any major treasury shift, including the proposed $100 million swap. If executed, the move could define the platform’s evolution in the face of rising competition from Ethereum, Solana, and others. For now, the ecosystem awaits a formal decision on the high-stakes diversification plan.
