Odaily reports that A16z crypto has sent a letter to U.S. Treasury Secretary Scott Bessent, urging the Treasury Department to clarify key definitions in the implementation rules for stablecoin regulation and suggesting that decentralized stablecoins be excluded from the scope of the GENIUS Act to promote innovation.
The bill, passed earlier this year, establishes a regulatory framework for "payment stablecoins" that aims to balance consumer protection, financial stability, and prevention of illicit financial flows.
In its letter, a16z pointed out that decentralized stablecoins such as LUSD, which is backed by Ethereum collateral, are issued through autonomous smart contracts and are not controlled by a centralized entity. Therefore, they "should not be regarded as being issued by any 'individual'" and should not be subject to the restrictions of Article 3(a) regarding licensed issuers.
a16z suggests that the Ministry of Finance refer to the decentralized determination framework based on "control" in the 2025 Digital Asset Markets Clarity Act to exclude activities such as node operation, transaction verification, and the development of non-custodial wallets from intermediary regulation.
In addition, a16z called for a level playing field and the modernization of anti-money laundering (AML) and KYC rules to prevent risks while avoiding stifling innovation.
Michele Korver, head of regulation at a16z, added that decentralized digital identity (DID), combining zero-knowledge proofs and multi-party computation, can strengthen national security while protecting privacy, helping to combat fraud and illicit transactions. (The Block)
