With former Donald Trump’s re-election to the U.S. presidency, Andreessen Horowitz, also known as a16z, is projecting a regulatory climate more favorable for the cryptocurrency industry.
The venture capital firm believes this could transform most crypto tokens into “legitimate and lawful” financial tools.
Innovation Within Regulatory Boundaries
In a November 10 post, a16z acknowledged questions from crypto founders seeking clarity on what this new administration may mean for their projects.
The company anticipates increased speculation about the incoming Trump administration’s stance on digital assets but cautions that the public should expect most of it to be “noise.”
However, it believes Trump’s return to office could create an avenue for “constructive engagement” with regulatory agencies as well as laws that could finally bring the sort of clarity many in the crypto industry have been calling for.
One central point highlighted in the statement is token issuance. For many founders who have delayed launching tokens over regulatory fears, the firm’s message is one of reassurance:
“For many of you who have delayed using tokens to distribute control of your project and build community due to fears of regulatory overreach, you should now have greater confidence in your project’s use of tokens as a legitimate and lawful tool.”
However, a16z stressed the importance of following fundamental governing principles. It advised crypto founders to focus on removing “centralized aspects or dependencies on trust” within projects, as such areas are known for attracting regulatory scrutiny.
New Tools to Support Token Use and Compliance
The post also outlined plans for a16z’s future advocacy efforts. These include promoting rule-making structures that support innovation and consumer protection.
The firm announced its upcoming release of new guidance on the Decentralized Unincorporated Nonprofit Association (DUNA) framework. These instructions aim to help projects make the U.S. their home base while protecting token holders from liability and addressing tax and compliance needs.
Through this plan, the crypto VC giant hopes to encourage greater adoption of tokens by reducing regulatory and financial obstacles for U.S.-based projects.
The firm believes the DUNA framework will support a broader range of crypto ventures by streamlining compliance, making it easier for legitimate projects to thrive in a regulated environment.
Ultimately, a16z, which previously supported Trump through donations, sees the next few years as a chance to regain momentum for legitimate crypto projects in the country.
It anticipates new, improved rules that will make identifying and shutting down bad actors easier. In turn, this will enable “well-meaning entrepreneurs” to develop secure and innovative crypto projects without unnecessary oversight roadblocks.
