A16z Crypto Addresses U.S. Treasury on Stablecoin Regulations
A16z Crypto has taken a proactive step by addressing U.S. Treasury officials regarding newly proposed regulations on stablecoins. In a letter sent on November 4th to Treasury Secretary Scott Bessent, the venture capital firm urged for clearer definitions within the legal framework established by the GENIUS Stablecoin Act, emphasizing the need to exempt decentralized digital currencies from regulatory constraints to stimulate innovation in the sector.
Concerns Over Decentralized Stablecoins
The letter commended the GENIUS Act as a noteworthy advancement for the evolution of digital finance. However, A16z Crypto expressed concerns about the implications of the Act on decentralized stablecoins, specifically questioning if these assets could be treated as exceptions under the proposed rules. The firm referenced LUSD, a stablecoin supported by collateral on the Ethereum network, to illustrate its point; they noted that such tokens are generated through automated smart contracts and lack central authority governance.
Call for Clarity on Definitions
A16z Crypto highlighted an essential perspective in its correspondence, urging the Treasury to explicitly acknowledge that decentralized stablecoins do not fall under the statute’s definition of issuance as dictated in Section 3(a). They argued that this section limits the generation of U.S. payment stablecoins to specific authorized issuers, which they believe should not apply to decentralized entities that operate independently of a single individual or organization.
