Venture capital firm Andreessen Horowitz (a16z) addressed a letter this week to the U.S. Treasury Department warning that excessive regulation of decentralized stablecoins under the proposed Genius Act could stifle innovation and harm the DeFi ecosystem. The statement was shared publicly by a16z’s head of regulatory affairs, Michele Korver, on X.
According to the letter, the firm argued that the current draft of the legislation risks “unintended consequences,” potentially driving developers and liquidity offshore. A16z emphasized that decentralized stablecoins differ fundamentally from traditional, custodial versions, as they operate autonomously through smart contracts rather than centralized issuers. The firm urged regulators to recognize this distinction to avoid applying legacy banking rules to blockchain-based systems.
A16z proposed that policymakers collaborate more closely with the crypto industry to ensure that new frameworks both safeguard consumers and support innovation. The letter also encouraged further research into decentralized risk management before imposing broad restrictions on stablecoins.
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