Cardano ADA/USD has surged 23% over the past week as co-founder Charles Hoskinson is exploring the possibility of launching a privacy-enabled stablecoin that functions with the anonymity of physical cash.

What Happened: Speaking on the Conversations with Leaders podcast hosted by eToro on May 9, Hoskinson said current stablecoins lack privacy and are too easily traceable on public blockchains like Ethereum ETH/USD and Solana SOL/USD, according to DL News.

While stablecoins are a $243 billion market, their transactions remain fully visible, raising privacy concerns for users.

Cardano currently supports stablecoins with a modest $31.5 million market cap, but Hoskinson hinted at making Cardano the first blockchain ecosystem to introduce a compliant yet privacy-preserving stablecoin.

Hoskinson argued that consumers might prefer not to have every purchase permanently recorded.

He proposed selective disclosure as a possible solution, enabling privacy in daily transactions while still allowing necessary regulatory access for law enforcement and financial compliance.

This concept, however, is not without precedent or controversy.

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Other privacy-centric projects such as Monero, Zcash and Firo have previously attempted to balance user privacy with regulatory demands.

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Strategies like whitelisted addresses and shielded transactions were designed to retain anonymity while permitting certain institutions to verify transactions.

Why It Matters: Despite these efforts, major regulators and exchanges have remained cautious, leading to delistings and declining liquidity in these assets.

The pressure is mounting from regulators worldwide.

The European Union plans to prohibit privacy coins on exchanges and custodial platforms by July 2027, a move that signals further regulatory tightening. In the United States, efforts to pass federal legislation on stablecoins have faced setbacks.

Last week, the GENIUS Act, a key stablecoin bill, failed to pass the Senate after objections from lawmakers who cited risks to financial stability and consumer protection.

Hoskinson's idea comes at a time when regulatory environments are rapidly evolving, and projects are under increasing scrutiny for how they balance user rights with legal obligations.

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