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- Andreessen Horowitz, a large venture capital firm in the crypto sphere, advises governments regarding the crypto regulation in a report that targeted the “world leaders.”
- Andreessen Horowitz, or a16z, recommended in its report better transparent tax codes and targeted” regulatory regimes” that acknowledge the disparity of the Web3 technology.
- A recipient of a16z’s largess, Coinbase put forward a proposal calling for a “single federal regulator” to oversee token and market registrations and enforce consumer protection last October.
Andreessen Horowitz, an American venture capital firm, put forward its views on crypto regulation in a report titled ” How to Build a Better Internet: 10 Principles for World Leaders Shaping the Future of Web3 “.
Andreessen Horowitz, who controls the fundings for various space startups and unicorns, in the report argued that the multi-stakeholder approach should be implemented for crypto regulation including businesses, governments, and civil society groups.
Further, the venture capital argues that stablecoins- fiat-pegged cryptocurrencies that are backed by a commodity or currency such as the US Dollar – needs to be regulated and should be leveraged for improving the financial system.
The report also noted every day Decentralized financial technologies already do hundreds of billions in transaction volume, giving us hope that there is a pathway for global, instantaneous, 24/7 financial rails. The report states that Stablecoins are the basic building block on which financial innovation takes place.
Further, Andreessen Horowitz also recommends “ targeted” regulatory regimes that acknowledge the Web3 technology diversity, more transparent tax codes, and collaboration on crypto standards.
Moreover, the report explained having one legal regime for covering stocks, real estate, cars, art, trading cards, and watches is analogous to handling all digital assets in the same way.
Coinbase, one of the recipients of a16z’s largess, last October presented a proposal calling for a “single federal regulator” for overseeing token and market registrations and enforcing consumer protection. Dan Gallagher, Robinhood Chief Legal Officer, declared the plan which perceived the need for the establishment of a new regulatory body, as “one of the stupidest ideas I’ve heard in this space in a long time.”
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However, Coinbase opposing the perception, said that plan does not require the creation of a new agency and is “regulator agnostic”
Later, FTX also launched its policy document which mainly focused on the US Regulation that needs to be applied to other jurisdictions. It suggested a “primary market regulator” that spans both derivatives and spot markets, the Commodity Futures Trading Commission is responsible for the former while the Securities and Exchange Commission is responsible for the latter.
The proposals continued with Binance’s crypto bill of rights, in which the exchange talked concisely about the crypto regulation. In the proposal, it recommended that the Marketplaces should offer derivative instruments which should be subjected to the appropriate crypto regulations. According to the exchange, it will ensure that all the eligibility requirements are met by the users and their transactions are settled reasonably.
After both Binance recommendations and the Andreessen Horowitz proposal, the readers wonder what could be the reason between Jerome Powell’s call for an “appropriate regulatory framework” for the pegged assets and Binance’s recommendation for “well-regulated” stable coins.
Nevertheless, Andreessen Horowitz’s report pointed towards the aching need for a clear framework in order to legally create, sell or hold tokens and other digital currencies, however, the a16z document targeted the “world leaders” and not just the U.S. signals.
Andrew is a blockchain developer who developed his interest in cryptocurrencies while pursuing his post-graduation major in blockchain development. He is a keen observer of details and shares his passion for writing, along with coding. His backend knowledge about blockchain helps him give a unique perspective to his writing skills, and a reliable craft at explaining the concepts such as blockchain programming, languages and token minting. He also frequently shares technical details and performance indicators of ICOs and IDOs.
