Author: Miles Jennings, General Counsel and Head of Decentralization at a16z crypto; Michele Korver, Regulatory Affairs Lead at a16z crypto; Brian Quintenz, Policy Lead at a16z crypto; Translated by 0xjs@Jinse Finance
Crypto founders have been asking us what the recent U.S. election means for their projects. We've told them that we have a great opportunity to build on the bipartisan cooperation of the last Congress and bring the best of crypto to the world.
Over the next few months, we expect to hear a lot of speculation and "hot takes" about what's going to happen on the legislative and regulatory fronts - most of which will just be noise. The truth is, it's still too early to judge how everything will unfold, but we know that it's hugely significant for the industry. We're cautiously optimistic that the government will now promote innovation, accelerate progress, and allow the crypto ecosystem to thrive in the U.S.
This will enable us to realize many exciting consumer benefits in the future: giving people control over their own digital identities, providing new business models for creativity, enabling low-cost or free cross-border transactions with stablecoins, offering new ways for small businesses like restaurants to interact with customers, the emergence of decentralized social networks, the development of physical infrastructure like energy grids, blockchain-powered democratization of AI and gaming, and more that we can't even imagine yet.
The good news is that there is now a path to constructive engagement with regulators and legislators that can bring regulatory clarity. Now, you should all feel empowered to explore all the breakthrough products and services, including tokens, that blockchain can support. While we may have greater experimental flexibility, we can't forget that the fundamental regulatory principles applicable to blockchain systems remain in place. This means that "trust requires oversight" still applies. So you should continue to focus on eliminating centralization or reliance on trust in your projects, as these areas will continue to face regulatory scrutiny.
Next year, we'll advocate for clear regulatory frameworks to foster and support innovation and decentralization. This is both an opportunity and a responsibility for builders - you can proactively shape the future by developing projects that demonstrate how decentralized protocols can mitigate risks and prove the viability of new regulatory approaches.
This will provide a path to decentralization for well-intentioned entrepreneurs, while also protecting consumers by ensuring early detection of fraud and scams.
Regardless of how new legislation or the regulatory environment adjusts, regulators and policymakers will still maintain effective oversight over certain aspects of the industry. This is particularly true for token issuances, where the principles-based guidance in our token issuance playbook still applies.
We should expect that these clearer rules going forward will make it easier to identify and shut down bad actors (like FTX), while allowing well-intentioned projects to take flight. This can both protect consumers and rebuild trust and confidence in the technology. The previous enforcement-focused regulatory approach lacked regulatory clarity, hindering good actors while enabling bad ones, actively harming consumer interests and unfairly undermining trust in the space.
However, for many, concerns about over-regulation have led to hesitation in using tokens to distribute project control and build community. Now, you should feel more confident in using tokens as a legitimate tool for your projects. We'll also be releasing new guidance soon on using decentralized autonomous non-profit associations (DUNA) for projects looking to establish a presence in the U.S., shield token holders from liability, manage tax and compliance requirements, and facilitate more economic activity.
The future of crypto in the U.S. is bright - this is the best time to be building in the U.S., and we're excited about the prospects of ultimately achieving regulatory clarity.
