Original title: Making the US the crypto capital: What it would take
Original source: a16z
Original translation: Tom, MarsBit
The United States appears to be shifting from an adversarial stance toward blockchain and cryptocurrency to a more supportive posture, providing clear guidance and rules to help builders follow them. While this shift is still in its early stages, the government has taken some encouraging steps toward this goal. New leadership, new rules, new working groups — all of these measures provide the crypto industry with something it desperately needs: a tangible path forward.
While crypto startups have faced challenges in recent years, including lawsuits, turf wars between regulators , angry letters from lawmakers, unbanking incidents, and regulation through enforcement, the past few weeks have shown a more optimistic, pro-tech attitude. From the White House to regulators, we have seen moves to appoint AI and cryptocurrency commissioners and issue executive orders to support blockchain development. The Securities and Exchange Commission ( SEC ) has established a new cryptocurrency task force and repealed the Staff Accounting Bulletin 121 rule that once hindered the development of cryptocurrency. In both houses of Congress, key lawmakers have also expressed a willingness to pass legislation to clearly define the rules for the industry.
To facilitate dialogue between government officials and blockchain experts, we collected opinions from 11 industry experts on issues ranging from taxation and the freedom to stake to broader issues such as encouraging decentralization and reforming the regulatory system in the U.S. These perspectives provide important considerations for policymakers to better think about cryptocurrency regulation and ensure that the United States leads this critical moment in the transition to the next generation of the Internet.
1. Why decentralization is so important and why incentives are needed
——Miles Jennings
Decentralization is essential. It drives new governance structures, organizational forms, and powerful economic systems—which means more choice, more voice, and more competition. But in practice, decentralization has been difficult to achieve because it often lacks the efficiency and stability of centralized systems before the technology for large-scale coordination is available (or accessible to everyone)—until now.
Over the past decade or so, as technology has continued to develop, we have reached a stage where decentralization can really work and can be applied to many areas of digital life. But now we face a new challenge: how to incentivize decentralization. Despite many obstacles, many builders have successfully achieved decentralization on a large scale. In order to attract more builders to participate, we just need a clearer path forward and a level playing field.
“Like gravity, centralization is a force that is difficult to resist. In contrast, decentralization — the transfer of control and power to distributed groups — is inefficient. It requires enormous energy, effort, and engineering feats to overcome the natural order.”
Miles Jennings is General Counsel at a16z Crypto , where he advises the firm and its portfolio companies on decentralization, DAOs, governance, NFTs, and state and federal securities law. Prior to that, he was a partner at Latham & Watkins and co-led the firm’s global blockchain and cryptocurrency working group.
2. The SEC embraces the (digital) age
——Scott Walker and Bill Hinman
The U.S. Securities and Exchange Commission (SEC) can make six immediate changes to the regulatory rules that apply — without sacrificing innovation or critical investor protections.
“Through these adjustments, the SEC can restore its mission and reposition itself as a forward-looking regulator that ensures U.S. markets remain competitive while protecting the public interest.”
Scott Walker is the Chief Compliance Officer at Andreessen Horowitz. Prior to that, he served as a senior expert in digital assets and blockchain technology at the SEC and as a vice president and legal counsel at BlackRock, focusing on derivatives, prime brokerage, and securities financing transactions.
Bill Hinman is currently an advisory partner at a16z crypto and a senior advisor at global law firm Simpson Thacher & Bartlett LLP. From 2017 to 2020, Bill served as the head of the U.S. Securities and Exchange Commission's Division of Corporate Finance.
3. Let staking flourish in the United States
—Ji Kim and Alison Mangiero
Staking — letting users participate in maintaining and securing a particular blockchain network — has revolutionary potential. Here are five steps the SEC can take to ensure the staking industry thrives.
"The United States should lead innovation, focusing on how to make this "financial" infrastructure more efficient, secure, and accessible."
Ji Kim is the President and Interim CEO of the Crypto Council for Innovation. Previously, he served as the group’s Chief Legal and Policy Officer and has 15 years of experience as a legal advisor and policy executive for technology companies.
Alison Mangiero is the Executive Director of the Proof Of Stake Alliance, a project within the Innovative Crypto Council dedicated to advocating for clear and forward-looking public policies to promote innovation in the staking industry. Previously, she founded the Tocqueville Group, an entity that creates open source software and other public products for the Tezos blockchain network.
4. Ending the era of mass financial surveillance
——Grant Rabenn
The Bank Secrecy Act of 1970 created a massive database of financial records — the FinCEN database — that puts our sensitive personal data at risk. Blockchain technology offers a better way forward.
“The Bank Secrecy Act has spawned a vast regulatory-industrial complex that requires U.S. financial institutions to routinely monitor their customers.”
Grant Rabenn is the Head of International Legal and Compliance (APAC and Americas) at Coinbase. Prior to joining Coinbase, Grant served as a prosecutor in the federal government for ten years, specializing in money laundering and cybercrime cases, and led the government's early investigations involving cryptocurrency.
5. Anyone can be unbanked. Decentralized Finance ( DeFi ) is a critical safety net
——Katherine Minarik
What happens when you lose control of your family’s primary bank account — with no explanation or avenue for appeal? Self-custody crypto assets can provide a lifeline when traditional finance fails.
"That bank has frozen all our accounts indefinitely. Our bank staff can't tell us anything more. Not even if, how or when we can get our funds back... It's extremely scary."
Katherine Minarik is the Chief Legal Officer of Uniswap Labs. Prior to that, she served as Vice President and Deputy General Counsel at Coinbase , responsible for global litigation.
6. It’s time to put your assets on the blockchain
——Jenny Cieplak
“ Tokenization ” — a method of digitizing asset records, usually on a blockchain — has the potential to significantly modernize financial infrastructure. If the U.S. Securities and Exchange Commission (SEC) stops arbitrarily prohibiting these assets from being put on blockchain, traditional financial institutions could benefit.
“In theory, this should open the door to using the latest and greatest technologies — including blockchain and distributed ledger technology.”
Jenny Cieplak is a partner at Latham & Watkins LLP, specializing in advising fintech and financial services clients on the development and deployment of new technologies. Her practice blends the intersection of industry regulation, cutting-edge technology, and financial services.
7. Why the DOJ’s Action on DeFi is a Disaster
—Miller Whitehouse-Levine and Amanda Tuminelli
All other policy and legal issues must start from a core question: Who is in control? Some lawsuits against DeFi protocols are based on false assumptions about the identity of the controller and the extent of their control, causing unnecessary harm to the development of blockchain.
"It is patently unreasonable to place liability on automakers for the improper driving behavior of the users of their vehicles, and the same logic applies to placing liability on the drivers themselves."
Miller Whitehouse-Levine is the CEO of the DeFi Education Fund. Prior to that, he led policy operations for the Blockchain Association and worked on a variety of public policy issues involving cryptocurrency at Goldstein Policy Solutions.
Amanda Tuminelli is the Chief Legal Officer at the DeFi Education Fund, where she leads impact litigation and policy work. Previously, she worked as an attorney at Kobre & Kim, defending clients in criminal and regulatory investigations, government enforcement actions, and large-scale litigation, particularly in the cryptocurrency and blockchain space.
8. Why do we need decentralized stablecoins?
——Luca Prosperi
Centralized stablecoins have become the backbone of DeFi, but they rely on traditional financial intermediaries. Decentralized stablecoins can serve as a reliable, efficient, and trustless system that reduces reliance on custodial financial intermediaries.
“This world of so-called decentralized stablecoins has the potential to revolutionize not only the way we create money, but actually the entire system of financial intermediation.”
Luca Prosperi is the co-founder and CEO of M^0, a project dedicated to the construction of decentralized stablecoin infrastructure. Previously, he was responsible for lending supervision at the DeFi project MakerDAO and published research at Dirt Roads.
9. Rethinking SEC rulemaking: Why cryptocurrencies need their own rules
——Scott Walker
It doesn’t always make sense to apply rules written for traditional securities markets to cryptocurrencies, but the SEC appears to be doing just that. Now the SEC has an opportunity to adopt a tailored approach to rulemaking that will help blockchain technology flourish while protecting investors and consumers.
“The SEC is often criticized for its “enforcement-style regulation” in cryptocurrency-related matters, but less attention has been paid to the fact that its “rule-broadening” approach — applying rules written for other markets or products directly to emerging technologies — is also counterproductive.”
Scott Walker is the Chief Compliance Officer at Andreessen Horowitz. Prior to that, he served as a senior expert in digital assets and blockchain technology at the SEC and as a vice president and legal counsel at BlackRock , focusing on derivatives, prime brokerage, and securities financing transactions.
10. How the U.S. could benefit from effective cryptocurrency tax policies
——David Kerr
Given the complexity of tax laws and the innovative organizational structures required for decentralized systems, policymakers have had difficulty effectively developing rules for reporting requirements and tax treatment of digital assets. However, this legislative session provides a historic opportunity for the United States to retake leadership as cryptocurrencies are reshaping the global financial system and influencing the future of the internet.
“Will the United States be the one to write the rules for the 21st century Internet, or will it just have to watch others reap the fruits of their labor?”
David Kerr is the principal of Cowrie LLC. He has 10 years of experience in tax strategy, financial accounting and risk consulting. He has provided risk avoidance strategies to clients in industries such as gaming, telecommunications and technology-driven online sales platforms, focusing on the development of Web3 issues.
11. Should the United States implement a strategic Bitcoin reserve?
——Christian Catalini
The recently proposed strategic reserve of Bitcoin is a good start — but it is only a start. There is another opportunity: using Bitcoin to bridge conflicting parts of the global financial system while maintaining U.S. dominance.
“But the real opportunity lies not in simply storing Bitcoin; it lies in integrating it into the global financial system in a way that strengthens America’s economic leadership, not undermines it.”
Christian Catalini is the co-founder of Lightspark and founder of the Cryptoeconomics Lab at MIT.
