The crypto arm of venture capital firm Andreessen Horowitz (a16z) said there will be “greater flexibility to experiment” as the regulatory landscape for crypto improves in the United States following the Nov. 5 elections.
“While we’ll likely have greater flexibility to experiment, we can’t forget that the fundamental regulatory principles applicable to blockchain systems remain unchanged,” it said, before adding that this means “where there is trust, there is regulation” still applies.
The firm’s crypto, legal and policy experts Miles Jennings, Michele Korver and Brian Quintenz shared a positive outlook for crypto regulations in a blog post on Nov. 10, days after Donald Trump’s presidential election victory.
“We’re very optimistic that the government will now foster innovation, accelerate progress, and enable the crypto ecosystem to thrive in the U.S.”
Trump promised a pro-crypto political stance that was lacking in the previous administration. This will lead to an “incredible opportunity” to build on bipartisan progress, according to the a16z team.
“The good news is that there is now a pathway for constructive engagement with regulatory agencies and legislation that can bring regulatory clarity.”
They added that bipartisan progress from the previous Congress provided a foundation for growth, which should combine with a shift from regulation-by-enforcement to clearer regulatory frameworks for the industry.
They said this could be good for digital identity ownership, new creative business models, low-cost cross-border transactions with stablecoins, decentralized social networks, energy grid infrastructure development and AI and gaming applications.
The firm said it will advocate for clear regulatory frameworks that “foster and bolster innovation and decentralization” in 2025, adding that crypto founders and developers can “actively shape this future by developing projects that demonstrate how decentralized protocols eliminate risks and justify new regulatory approaches.”
Jennings, Korver and Quintenz were critical of the previous approach to regulating the industry and concluded that there were brighter days ahead.
“The previous approach of regulation by enforcement, with no regulatory clarity, both blocked good actors and allowed bad actors, which actively harmed consumers and unfairly eroded trust in the space.”
“The future of crypto in the US is bright – it’s the perfect time to build here,” they concluded.
Related: a16z-backed onchain messaging platform Towns officially launches
The outlook contrasts with the warning the firm issued to crypto startup founders in April, advising that they stay out of the US market when conducting token sales.
A16z is one of the crypto industry’s largest investors, having put its weight and money behind hundreds of startups, including Coinbase, Aptos, Avalanche, Dapper Labs, dYdX, EigenLayer, Lido, Maker, Matter Labs, Nansen, Near Protocol, OpenSea, Solana and Uniswap among others.
It also donated millions of dollars to pro-crypto super political action committees such as Fairshake in the run-up to the election.
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