A16z Calls on the US Treasury to Exempt Decentralized Stablecoins from Regulation

On November 12th, A16z Crypto presented a proposal to U.S. Treasury officials. It called for the clarification of key definitions in the new stablecoin regulations. The company argued that decentralized digital assets should be exempt from regulation in order to promote innovation. In a letter sent to Treasury Secretary Scott Bessent on November 4th, the firm responded to the proposed rulemaking notice issued earlier this year under the GENIUS Stablecoin Act. A16z Crypto praised the GENIUS Act in the letter, considering it a "significant step towards the future of digital finance." At the same time, it called for clarification on whether decentralized stablecoins are outside the scope of the Act. By citing LUSD backed by Ethereum collateral as an example, the company argued that decentralized stablecoins are issued through autonomous smart contracts and are not controlled by a central entity. The letter pointed out: "The Treasury should clearly state that, since decentralized stablecoins are not issued by an 'individual' in the sense of the Act, they are not subject to the restrictions of Section 3(a)." According to the letter, Section 3(a) restricts the issuance of U.S. payment stablecoins to only allowable issuers.