On building a crypto capital [newsletter]
Editor’s note: This post originally appeared in our newsletter — a guide to trending topics in crypto with insights and resources from engineers, researchers, and others on the a16z crypto team. Subscribe to see it in your inbox every other week.
The U.S. seems to be turning its combative stance on blockchains and crypto toward a more supportive one that offers guidance and clarity on the rules for builders to follow.
Recent years have been marked by lawsuits against startups and regulation-by-enforcement, but the past few weeks have signaled a much more optimistic approach. In the last week alone, we saw new draft legislation on stablecoins, and SEC Commissioner Hester Peirce laid out 10 priorities for the new crypto task force, including clarity around staking and crypto exchange-traded products (ETPs).
To foster ongoing conversation between government officials and blockchain experts, we’ve gathered 11 views from industry experts on issues ranging from encouraging decentralization to reforming the U.S. regulatory regime.
Here are just a few…
1. Why decentralization matters, and needs incentives
by Miles Jennings, General Counsel of a16z crypto
Decentralization matters. It enables new governance, organizations, and robust economies — leading to more choice, more voice, and more competition.
But in practice, it’s been hard to pull off because the technologies to coordinate at scale haven’t been possible (or available to all). Against the efficiency and stability of centralized systems, decentralized options didn’t stand a chance… until now.
“Much like gravity, centralization is a force that’s hard to resist… It requires immense energy, effort, and engineering to overcome the natural order.”
2. Anyone can get debanked. DeFi is a critical safety net.
by Katherine Minarik, Chief Legal Officer at Uniswap Labs
What happens when you lose control of your family’s main bank account without any explanation or recourse? Self-custodying crypto assets can provide a lifeline when traditional finance fails you.
“The bank had frozen all of our accounts indefinitely. Our banker was not allowed to tell us anything else. Not even if or how or when we might get our money back.”
3. Should the United States implement a Bitcoin strategic reserve?
by Christian Catalini, Co-founder of Lightspark and the MIT Cryptoeconomics Lab
The recently proposed Bitcoin strategic reserve is a great first step — but it’s only that, a first step. Another opportunity exists: to use Bitcoin to connect conflicting parts of the global financial system while maintaining the preeminence of the United States.
“The real opportunity isn’t in simply stockpiling Bitcoin; it’s in shaping its integration into the global financial system in a way that reinforces U.S. economic leadership rather than undermining it.”
4. Why we need decentralized stablecoins
by Luca Prosperi, Cofounder and CEO at M^0
Centralized stablecoins have become pillars of DeFi, but they rely on traditional financial intermediaries. Decentralized stablecoins can serve as reliable, efficient, and trustless systems that reduce the need for custodial financial intermediation.
“This world of so-called decentralized stablecoins stands to revolutionize not only the way we create money but, really, the whole financial intermediation stack.”
5. A new (digital) age at the SEC
by Scott Walker, Chief Compliance Officer at a16z, and Bill Hinman, Advisory Partner at a16z crypto
The SEC can easily make six adjustments, immediately, to create fit-for-purpose regulations without sacrificing innovation or critical investor protections.
“With these adjustments, the SEC can reclaim its purpose and reposition itself as a forward-thinking regulator, ensuring that U.S. markets remain competitive while also safeguarding the public.”
— a16z crypto editorial team
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