Hoskinson at the UN Proposes Compliance Through Blockchain

Charles Hoskinson proposed using blockchain to enforce legal requirements during transactions in a speech at an event at the United Nations in New York.

The model would combine regulator-certified software with privacy and digital identity tools, giving businesses shared infrastructure for compliance across jurisdictions. He connected the approach with his work on Midnight, the data protection blockchain within the wider Cardano ecosystem.

The proposal also addressed who controls that infrastructure. Hoskinson argued that blockchain rules should protect people against fraud while constraining the institutions and companies governing digital money and identity.

Legal Requirements as Open-Source Software

Under the model Hoskinson outlined, regulators would begin by specifying the outcomes they want to achieve, such as preventing consumer fraud, protecting personal information, or addressing tax evasion.

Development teams would build open-source software to implement those requirements. Regulators would review and certify the solution, allowing businesses to incorporate it into their products. Compliance checks would become part of the infrastructure through which a service operates.

He summarized the approach as “settlement is compliance,” envisioning transactions whose execution incorporates the required checks. Entrepreneurs adopting a certified system could, in his proposed framework, satisfy the requirements for the operations it covers.

Software libraries for individual countries would handle jurisdiction-specific rules. An application serving a customer in Mexico would use the corresponding Mexican library; one serving a German customer would incorporate the German requirements. Transactions involving people in several countries would process the applicable rules for each participant.

Businesses often prioritize the jurisdiction where they operate or face the greatest regulatory exposure, Hoskinson argued. Shared libraries would support wider application of local requirements without requiring each company to build its own compliance framework from the ground up.

Open development would also allow useful solutions from smaller countries to be reviewed and adapted elsewhere. He compared this with collaboration on software, where developers assess whether code works rather than the political influence of its country of origin.

The proposed partnership would bring regulators and industry specialists into a common development process. Compliance engineers would embed legal requirements in products, taking on work currently handled through administrative procedures.

Hoskinson contrasted this with the crypto industry’s experience of the U.S. Securities and Exchange Commission under former Chair Gary Gensler. He criticized demands to register decentralized systems without clear instructions and argued that fear of enforcement discouraged conversations that could have helped regulators understand the technology.

Midnight Connects Privacy, Identity, and Verification

Hoskinson described Midnight as part of an effort to connect privacy, identity, and interoperability, capabilities he considers insufficiently developed across the blockchain industry.

Financial and identity applications must establish whether users meet specific requirements while handling information those users do not want to publish. Midnight provides a platform for applications that combine publicly verifiable results with private data.

Its zero-knowledge proofs can establish that a statement is valid without publishing the sensitive information underlying it. A user could, for example, prove they meet an age requirement without revealing their exact date of birth. Developers define the conditions an application checks and the information disclosed during an interaction.

Hoskinson connected that foundation with regulators’ objectives of preventing fraud and abuse. His proposed systems would perform required checks while reducing exposure of private information and making compliance functions available through shared infrastructure.

He placed the proposal within the acceleration of artificial intelligence, computing, and synthetic biology. Small teams can develop technologies affecting millions of people, he argued, while institutional responses take much longer to emerge.

Competition between AI companies illustrated the problem. Even when executives publicly support responsible development, commercial pressure encourages each company to accelerate its own work. He compared this with a sport in which competitors adopt risky methods because they believe their rivals already use them.

His response was to change incentives and collaboration, allowing specialists across countries to develop, inspect, and improve common solutions. That approach would extend the methods of open-source development into regulatory implementation.

Digital Money and the Limits of State Power

Hoskinson warned that centralized control over money and identity could enable governments or private operators to restrict citizens’ everyday lives.

He offered a hypothetical scenario in which a digital euro payment for fuel could be rejected after a user reached a monthly purchasing limit, despite having sufficient funds. The example expressed his concern about possible future spending restrictions, alongside a demand for legal protections against such uses of digital money.

Privacy, freedom of movement, and control over personal funds should remain protected as those activities move into digital infrastructure, he argued. Excluding someone from payments could become a means of coercing their behavior.

Blockchain rules should therefore constrain those governing a system as well as its users. Hoskinson expressed this through the distinction between “don’t be evil” and “can’t be evil,” advocating protections embedded in protocols and collective participation in determining their rules.

His criticism extended to American politics. He addressed President Donald Trump’s meme token and weakening institutional accountability, attributing the latter to years of political behavior involving both major parties.

To explain the economic cost of lost trust, Hoskinson described purchasing a neighbor’s land. A dispute between people who trust each other might be settled through conversation. Without that trust, the same purchase could require expensive negotiations and years of litigation. The property acquired would be identical, but the transaction’s cost would differ substantially.

He described blockchain’s product as structures of trust that enable cooperation between people who do not know each other or trust the institutions mediating their interactions.

Hoskinson ended by reminding regulators that laws can be rewritten and that they answer to citizens. His proposed partnership would give industry specialists a role in building the tools, while leaving public institutions responsible for the protections those tools must enforce. “You work for the people,” he told the audience.