VC Firm Andreessen Horowitz Publish Its Vision For Future Crypto Regulation
Well-known VC firm Andreessen Horowitz (a16z) has laid out its vision for the future of crypto regulation. This comes after a similar move from other crypto giants.
7 January, Andreessen Horowitz released its “10 Principles for World leaders Shaping the Future of Web3,” a brief document giving their input on how governments regulatory policies towards crypto should be formed.
According to the document:
“Decentralized financial technologies already handle hundreds of billions in transaction volume every day and provide compelling evidence that there is a pathway for instantaneous, global, 24/7 financial rails. Stablecoins are a basic building block on which this financial innovation is occurring.”
The proposed 10 principles are as follows:
1. Establish a clear vision to foster decentralized digital infrastructure
2. Embrace multi-stakeholder approaches to governance and regulation
3. Create targeted, risk-calibrated oversight regimes for different web3 activities
4. Foster innovation with composability, open source code, and the power of open communities
5. Broaden access to the economic benefits of the innovation economy
6. Unlock the potential of DAOs
7. Deploy web3 to further sustainability goals
8. Embrace the role of well-regulated stablecoins in financial inclusion and innovation
9. Collaborate with other nations to harmonize standards and regulatory frameworks
10. Provide clear, fair tax rules for the reporting of digital assets, and leverage technical solutions for tax compliance
The principles themselves are somewhat inflated. They merely focus on the need “to harmonize standards and regulatory frameworks” among nations and calibrate risk for various web3 activities — sentiments that, on the surface, few would disagree with. But, in fact – as always with policy – the devil is in the details.
A16z’s statement of principles are very much alike to similar publications from crypto exchanges Binance, FTX and Coinbase. As the future of crypto seems more and more of a regulatory question, the industry’s largest players have become more vocal about what they think policymakers should do.
These firms have radically stepped up their policy activities since August, part of an industry-wide surge following the fight over crypto tax reporting language in the US Congress’s infrastructure package. Indeed, both authors of a16z’s pillars, Tomicah Tillemann and James Rathmell, joined the firm around the same time. Heavy hitters like former Commodity Futures Trading Commission leader Brian Quintenz and former Department of Justice section chief Jai Ramaswamy subsequently joined a16z as well.
Though a16z’s own position could be describes as biased, given the size of its investments in the space, tone can wonder about the difference between its version of “well-regulated” stablecoins and Jerome Powell’s call for an “appropriate regulatory framework” for the pegged assets.
Regardless, the a16z document – aimed at “world leaders” instead of just the U.S. – signals mounting desire for American policymakers and legislators to create clear frameworks for companies to legally create, sell, or hold tokens and other digital assets.
SEC has received its share of blame for their confusion, and many believe that the agency has stepped up enforcement actions against crypto projects unfairly under Chairman Gary Gensler without providing proper guidance.
