Cardano founder Charles Hoskinson argues that integrating Midnight with XRP Ledger-based DeFi could fundamentally disrupt legacy banking systems.
In recent commentaries, Hoskinson has outlined plans to introduce more efficient and potentially lucrative yield-bearing opportunities for XRP.
While he has not provided specific details about the initiative, he promised to intensify discussions next year. Recently, he clarified how such an integration could challenge traditional financial institutions.
In a widely shared social media statement, Hoskinson argues that integrating Midnight with XRPL DeFi could “blow legacy banks out of the water.”
Notably, Midnight, Cardano’s privacy sidechain, is built to support confidential smart contracts while remaining aligned with regulatory requirements. It enables sensitive financial data to stay private on-chain while still allowing regulators and institutions to verify transactions when necessary through selective disclosure.
Meanwhile, the XRP Ledger has long been known for its fast, low-cost payments and institutional-grade infrastructure. However, its DeFi ecosystem has lagged behind networks such as Ethereum and Solana due to the absence of native smart contract functionality.
While several projects, including Flare, have introduced DeFi solutions for XRP, adoption remains relatively modest compared to that of more established DeFi platforms.
Despite these limitations, Hoskinson argued that pairing XRP’s fast settlement layer with Midnight’s privacy smart contracts could produce a financial system that operates more efficiently than legacy banks.
His commentary reflects the widespread belief that banks rely on outdated and slow infrastructure. In contrast, an XRP DeFi environment powered by Midnight could offer near-instant settlement, lower costs, and programmable financial products while maintaining compliance and privacy.
Such a system could replicate core banking functions, including payments, lending, and settlement, without the friction of intermediaries.
Notably, this is not the first time Hoskinson has cited Midnight and XRP to challenge legacy finance’s capabilities. Just last week, he argued that both XRP and Midnight are “100x” ahead of traditional financial systems, particularly in the real-world asset (RWA) tokenization sector.
Following debates over the accuracy of that claim, Ripple CTO David Schwartz publicly acknowledged the privacy-focused blockchain. That recognition sparked a positive exchange, with Hoskinson expressing appreciation for Schwartz’s remarks.
While Hoskinson has revealed plans to ramp up efforts around XRP DeFi initiatives, specific details regarding when a fully functional product will reach the market have not yet been disclosed.
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