a16z: What Trump's victory means for encryption projects

Author: Miles Jennings, General Counsel and Head of Decentralization at a16z crypto; Michele Korver, Regulatory Head at a16z crypto; Brian Quintenz, Policy Head at a16z crypto; Translated by: 0xjs@Jinse Finance

Cryptocurrency founders are asking us what the recent US elections mean for their projects. We tell them that we have a great opportunity to build on the bipartisan cooperation of the last Congress and bring the best cryptocurrencies to the world.

In the coming months, a series of speculations and “hot topics” about what will happen in terms of legislation and regulation are expected to be heard—most of which are just noise. The fact is that it is still too early to judge how everything will develop, but what we do know is that this is significant for the industry. We are very optimistic that the government will now promote innovation, accelerate progress, and enable the crypto ecosystem to thrive in the United States.

This will enable us to achieve many consumer benefits in the future that excite us: allowing people to own their digital identities, providing new business models for creativity, using stablecoins for low-cost or free cross-border transactions, offering new ways for small businesses like restaurants to interact with customers, the emergence of decentralized social networks, the development of physical infrastructure like energy networks, as well as blockchain that democratizes AI and gaming, and much more that we can’t even imagine.

The good news is that there is now a path for constructive engagement with regulators and legislative bodies that can bring regulatory clarity. Now, you all should feel empowered to explore all the groundbreaking products and services supported by blockchain, including tokens. While we may have greater experimental flexibility, we must not forget that the fundamental regulatory principles applicable to blockchain systems remain unchanged. This means that “where there is trust, there is regulation” still applies. Therefore, you should continue to focus on eliminating the centralized aspects or reliance on trust within projects, as these areas will continue to be subject to regulatory scrutiny.

Next year, we will advocate for a clear regulatory framework to promote and support innovation and Decentralization. This presents both an opportunity and a responsibility for builders — you can actively shape the future by developing projects that demonstrate how decentralized protocols can mitigate risks and validate the rationale for new regulatory approaches.

This will provide a path of Decentralization for well-intentioned entrepreneurs, while protecting consumers by ensuring early detection of scams and fraud.

Regardless of how new legislation or regulatory environments are adjusted, regulators and policymakers will continue to effectively scrutinize certain aspects of the industry. This is especially true for token issuance, and the principled guidance in our token issuance manual remains applicable.

We should expect that these clear rules in the future will make it easier to identify and shut down bad actors (similar to FTX), while allowing good-faith projects to take off. This can both protect consumers and rebuild trust and confidence in the technology. Previous enforcement regulatory approaches lacked regulatory clarity, hindering good actors and enabling bad actors, which actively harmed consumer interests and unfairly undermined people’s trust in the field.

However, for many people, the use of tokens to allocate project control and build communities has been delayed due to concerns about excessive regulation. Now, you should be more confident in the use of tokens as legitimate tools for projects. We will soon release new guidelines on using Decentralization non-corporate non-profit organization association (DUNA), applicable to projects wishing to settle in the United States, exempt token holders from liability, manage tax and compliance requirements, and facilitate more economic activities.

The outlook for cryptocurrency in the United States is bright—now is the best time to build in the U.S., and we are excited about the possibility of achieving regulatory clarity.