Cardano Proposes $100 Million Treasury Shift to Stablecoins and Bitcoin

Charles Hoskinson, the founder of Cardano and CEO of Input Output Global, has proposed a significant shift in the protocol’s treasury management. He suggested converting $100 million worth of ADA into a mix of stablecoins and Bitcoin. This move aims to address Cardano’s low stablecoin-to-TVL ratio, which currently lags behind competitors like Ethereum and Solana, both of which exceed 100%.

Hoskinson argued that by allocating a portion of the treasury to support stablecoin liquidity, Cardano could strengthen its DeFi ecosystem and attract broader participation. The converted funds would be distributed across existing assets within Cardano, including stablecoins like USDA, USDM, and IiUSD, as well as Bitcoin to support emerging Bitcoin DeFi products. Hoskinson emphasized that ADA does not have a liquidity problem and that the network’s daily trading volume would be sufficient to absorb the proposed sale over time through OTC and TWAP mechanisms, dismissing concerns that such a transaction would depress the price of ADA.

The proposal also introduces the idea of a sovereign-style fund structure for managing treasury assets. This could involve the election of a governing board and partnerships with regulated Web3 asset managers to generate yield and reinvest proceeds into the ecosystem. Hoskinson highlighted the need to prepare Cardano’s treasury for multi-asset holdings, noting upcoming features such as partner chains and native token support. He suggested making provisions in the Constitution for more granular treasury management on the portfolio allocation side during the post-mortem on the budget process.

Hoskinson mentioned that discussions are ongoing with DeFi projects and large token holders, with the goal of having a formal proposal in place before the Rare Evo conference later this year. He also emphasized the need to enhance the voting system, suggesting the implementation of anonymous ballots for certain voting rounds to protect smaller stakeholders from potential retaliation.

Cardano is not alone in exploring treasury diversification through multi-asset reserves and off-chain yield generation. This approach follows the model of sovereign-style funds, where asset conversion and reallocation are managed to maintain spending capacity over time. Some DeFi ecosystems are also beginning to introduce formal oversight structures for protocol funds, including elected boards, third-party asset managers, and cross-chain capital deployment. These developments mark a shift in how on-chain treasuries are structured and governed.

Cardano holds one of the largest protocol treasuries in crypto, with around 1.7 billion ADA. Unlike some competitors, it currently lacks a yield strategy or multi-asset diversification, which this proposal seeks to change. The risks associated with converting ADA to stablecoins and Bitcoin include market exposure to external assets, execution slippage, and potential backlash from stakeholders concerned about deviating from ADA-only holdings. Regulatory classification of stablecoins could also affect the strategy. If treasury allocations shift to non-ADA assets, and yield returns are reinvested differently, governance weight tied to ADA holdings might dilute unless explicitly addressed in the system design.

Projects like MakerDAO, Optimism, and Uniswap have begun exploring treasury diversification through real-world assets, yield-bearing stablecoins, and partnerships with asset managers, but execution varies widely. Integrating BTC liquidity could attract new users, tap into dormant capital, and complement stablecoin growth, especially if paired with cross-chain yield strategies and institutional-grade custodial support.