A16z Shares Stance on US Crypto Policy, Predicts Web3 Will Have an Enduring Impact
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A16z crypto’s State of Crypto report highlights the implications of blockchains and Web3 for policymakers in the United States.
The internet stands as a pivotal innovation and a driving force for human advancement. However, it tends to fall short in serving those who depend on it the most — consumers, creators, developers and small businesses.
In the latest “Policy Spotlight” a brief analysis from a16z crypto’s State of Crypto Report, the venture firm highlighted the implications of blockchains for policymakers who are deliberating on the trajectory of innovation, markets and competitiveness in the United States within the realm of emerging Web3 technologies.
A16z Given that a significant majority of Americans already possess cryptocurrencies, it is evident that Web3 in the US is a lasting presence. Despite the fluctuating prices it has been the fourth consecutive year of double-digit growth in the number of active addresses across all tracked blockchains, indicating that the use of cryptocurrencies is also rising.
Crypto Policy’s Impact on Innovation, Protection and Compliance
The effective crypto policy in the US could incentivize innovation, safeguard consumers and offer businesses a clear path to compliance. Former legislators and agency heads suggest US legislators doing 3 things:
Ensure consumer protection: Regulators should investigate risks stemming from custodial relationships, conflicts of interest, and the involvement of digital assets in illicit financial activities.
Establish a route to compliance: Any legislative measures should offer entrepreneurs who have been developing decentralized networks and lawful enterprises (despite the uncertain environment) a compliance pathway based on disclosure.
Promote community ownership: Laws and regulations should effectively incentivize decentralization and community ownership, supporting the fundamental principles of web3 technologies that bring public benefits and pave the way for future innovations.
The research also outlined guiding principles for the US cryptocurrency policy and regulations, including
- Prohibiting new business models or technologies contradicts American values and shifts innovation and job opportunities to other regions
- Agency guidance and legislation that establish appropriate and transparent rules will not only safeguard consumers but also encourage fair competition. This includes enabling new innovators to challenge entrenched, centralized players and preventing regulatory capture by incumbents.
- Legal businesses and their customers should have access to financial services and legal protections, encompassing banking relationships and data privacy.
- Regulation should prioritize businesses rather than targeting widespread, decentralized, autonomous software that serves as a basis for innovation.
Blockchains have not only surfaced as a reliable solution but also signify a significant new computing movement, presenting opportunities and use cases that extend far beyond web3. Despite the industry’s potential—evident in one in five US adults having purchased crypto—there has been a notable absence of crucial regulatory guidance.
Although there has been some recent advancement, there remains a substantial amount of work to be done. By formulating clear and practical rules, the US can cultivate innovation, secure its global leadership, and pave the way for future progress across the board.
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