Everyone has a different opinion on what crypto regulations should look like. After seeing major cryptocurrency exchanges Coinbase, FTX and Binance present their visions, a16z, a venture capital firm that has been funding numerous crypto startups and unicorns, came up with its own proposal.
Andreessen Horowitz (referred a16z) in a report entitled “How to Build a Better Internet: Web3 world leaders to shape the future of the 10 Principles” document , the advocate multistakeholder including government, business and civil society groups, including relevant method of supervision. It also speaks for fiat-pegged stablecoins that it hopes will be “well regulated” to help improve the financial system. Stablecoins are known to offer easy access to decentralized protocols, but U.S. officials have been wary of them.
“Decentralized financial technologies already process hundreds of billions of dollars in transaction volume every day and provide compelling evidence that there is a path to instant, global, 24/7 financial orbit,” a16z wrote in the report “Stablecoins are the foundation on which this kind of financial innovation takes place,” he said.
a16z also recommends that countries collaborate on encryption standards, more transparent tax codes and “targeted” regulatory regimes to recognize the diversity of Web3 technologies. “Treat all Crypto assets the same way, like having a single legal regime covering stocks, real estate, cars, art, watches and trading cards,” it said.
In October last year, Coinbase, one of a16z’s investments, proposed policy guidelines for the U.S. market. The proposal calls for a “single federal regulator” to oversee token and market registries and enforce consumer protections. The plan, which was seen as requiring the creation of a new regulator, drew ridicule from Robinhood chief legal officer Dan Gallagher , who called it “one of the dumbest ideas I’ve heard in this space in a long time.” Coinbase later told Decrypt , the plan is “undecided with respect to the regulator” and therefore does not necessarily require a new agency.
Late last fall, Coinbase rival exchange FTX also released its own policy document , which focuses primarily on U.S. regulations but could apply to other jurisdictions as well. It calls for the creation of a “primary market regulator” that could cover both spot and derivatives markets; in the US, the Securities and Exchange Commission (SEC) primarily oversees the former, while the Commodity Futures Trading Commission (CFTC) is responsible for the latter.
Sandwiched between these two in-depth proposals is the crypto bill of rights proposed by Binance . Binance, which has been targeted by national regulators in 2021, succinctly lays out the rationale for regulation in its documents. For example, it said: “Markets offering derivatives should be properly regulated. This ensures that all users meet the eligibility requirements and that their trades are fairly settled.” Binance did not elaborate on what “appropriate” means.
In addition to the major exchanges, other crypto companies have issued guidelines, including Ripple Labs, which is currently responding to a $2.3 billion SEC lawsuit against it and its executives.
Like Binance’s proposal, a16z’s proposal leaves room for readers to paint some pictures. Given the size of a16z’s investments in the crypto space, its own stance is naturally clear, but readers can’t help but wonder if its so-called “well-regulated” version of stablecoins and Fed Chair Jerome Powell’s targeting of stablecoins How different is the call for an “appropriate regulatory framework” for cryptocurrencies.
Still, the a16z document, while aimed at “world leaders” rather than the US, also shows that a growing number of US policymakers and lawmakers want a clear framework for companies to legally create, sell or hold a proxy coins and other Crypto assets.
Many have blamed the SEC for chaos in crypto regulation, arguing that the agency, under Chairman Gary Gensler, has stepped up enforcement actions against crypto projects without providing coherent guidance. In an interview last December , Blockchain Association executive director Kristin Smith said of Gary Gensler: “We agree with some of the things he wants to see, like investor protection and market integrity…I think we continue to exist with him. What is at odds is the view that the law is very clear.”