Cardano’s Charles Hoskinson says the future of crypto wallets will be inside iPhones and Androids

A notable development has hit the crypto markets. At Consensus 2026, Cardano's Charles Hoskinson said that “users should probably never have their private keys,” adding that “something should have the private keys for the users. ” He argued that the secure chips already embedded in iPhones, Android phones, and Samsung devices outperform those in Ledger and Trezor devices, and that most crypto users already carry better signing hardware in their pockets without realizing it. Private key management has been a bottleneck to retail adoption since Bitcoin's earliest days.

Users have trouble with their 12- or 24-word seed phrase, usually forgetting it, photographing it, storing it in cloud notes, or losing it entirely. Hardware wallets solved the extraction problem, since a Ledger or Trezor generates and stores keys that never leave the device in plaintext, while introducing a friction that mainstream users have consistently rejected. FIDO reported on May 7 that there are now 5 billion active passkeys globally, with 75% of consumers having enabled at least one.

Market Dynamics

Users already accept device-bound, biometric-unlocked credentials as a normal part of authentication. Coinbase's smart wallet operationalizes this by letting users onboard without a recovery phrase, using Apple or Google passkeys, and by creating a non-exportable credential bound to secure hardware. Face ID or a PIN becomes the only interface the user needs.

Hoskinson is correct that mainstream phones contain serious security hardware. Apple's Secure Enclave is a dedicated subsystem isolated from the main processor, and the firm says it protects sensitive data even if an attacker compromises the application-processor kernel. Android's Keystore system supports hardware-backed keys that can stay non-exportable and bind to a Trusted Execution Environment or secure element, with StrongBox implementations adding a dedicated CPU and further isolation requirements.

Samsung's Knox system provides hardware-backed key protection through TrustZone, with DualDAR adding additional encryption layers for managed work profile data. Hoskinson described the Knox work profile as “a separate operating system, separate circuits in the hardware. ” Seed phrase wallet Derived from a 12- or 24-word recovery phrase, often stored in software or written down by the user Yes, potentially — the secret can be exposed through bad storage, screenshots, cloud backups, phishing, or device compromise Yes — if the wallet app or device is compromised, the attacker may trick the user or steal the secret outright Usually through the wallet app interface on the same device Low-friction onboarding, small balances, users comfortable with manual backup Phone-based hardware-backed wallet Inside a phone’s secure hardware, such as Apple Secure Enclave, Android Keystore/TEE/StrongBox, or Samsung Knox-backed protections Generally no — the key can remain non-exportable and bound to device hardware Yes — the key may stay protected, but a compromised app or OS could still try to get the device to sign something malicious Through the phone UI, biometrics, PIN, and wallet prompts; security depends heavily on approval UX and intent verification Everyday payments, routine self-custody, mainstream users, seedless/passkey-style onboarding Dedicated hardware wallet Inside a separate signing device such as Ledger or Trezor Generally no — keys are designed to stay on the device and not leave in plaintext Much harder, but not impossible — the key is better isolated, though attackers may still try to deceive the user into approving a bad transaction On the wallet’s own trusted display / secure screen, physically separate from the phone or computer Larger balances, long-term storage, users who want stronger isolation and a cleaner threat model Dedicated wallets hold an advantage Phone-based secure hardware and dedicated signing devices operate on different threat models.

Market Impact

Ledger's secure element drives a secure screen on the device itself, so users can verify transaction details even when the connected phone or laptop is under attack. Trezor's trusted display shows the transaction being signed, regardless of what the host machine displays. Trezor's newer Safe 3, Safe 5, and Safe 7 models also include secure elements, so the critique that hardware wallets lack secure silicon is now outdated.

The shortcoming Hoskinson identified is accessibility, since Ledger and Trezor require a separate device, a companion app, and a signing flow that interrupts the transaction. For everyday transaction volumes and routine self-custody, phones are plausible primary signers. For larger balances or users who want the strongest available threat model, dedicated devices with isolated displays keep the signing screen physically separate from the compromised machine, ensuring that the host's malware cannot reach the display.

The integration of AI into payments adds a layer to the stack. AI agents need payment authority to be useful, but granting an agent access to a master private key is something most users would not knowingly accept. The viable architecture is bounded delegation, consisting of an agent authorized to spend within preset limits, during a set period, without access to the credential that controls the broader wallet.

Crypto markets are watching this development closely as investors weigh its potential impact on prices.