After Trump's victory in the U.S. presidential election, he returned to the White House in glory. Compared with his previous encryption proposals, how should the pro in the industry view the development opportunities that the U.S. government should seize next? This article is from Brian Quintenz, a16z's policy director, a16z's policy director. The Chinese pro, who has written an article called "Seven things U.S. government agencies can do to help seize the web3 opportunity," compiled, translated, and rewritten by Foresight News. (Previous summary: Preparing for the U.S. election》How did the S&P 500 and BTC perform historically after the past ten elections? ） (Background supplement: Wall Street giant Bernstein: Regardless of who is elected President of the United States, BTC will break through $200,000 in 2025) For a government, formulating effective policies for emerging technologies may be challenging, especially when the technology does not conform to traditional regulatory frameworks. This is the case of Web3, as Decentralization systems are inherently unable to comply with traditional legal requirements. For example, current rules assume the existence of some form of centralized intermediary, while Web3 typically does not have a centralized intermediary. These rules aim to drop the conflicts of interest and information asymmetry caused by trusted centralized entities such as management teams; however, applying such rules to Decentralization systems may force the system to re-centralize, hinder innovation, undermine the transformative potential of Web3, and harm user interests. Decentralization has already reshaped social media, identity management, creative industries, and finance. Although the United States has the highest adoption rate of Cryptocurrency in developed countries, it does not have an effective Decentralization encryption asset regulatory system. While the U.S. has made some progress (such as FIT21 and DUNA in Wyoming), significant legislative progress is still needed to provide regulatory clarity, appropriately encourage Decentralization, and protect consumers. Regardless of who wins the U.S. election, government departments and agencies can take some simple steps (without legislation) to help the United States seize the Web3 opportunity. Here are the seven most important ones. Although this list is not exhaustive, it should help the U.S. government and other stakeholders understand how to move in the right direction. 1. Relevant departments should include promoting competition and innovation in their duties As Marc Andreessen and Ben Horowitz said, the key to U.S. tech dominance has always been startups. They observed: "Startups are a group of brave, rejected and unconventional people who come together with dreams, ambitions, courage, and a special trap of skills to create new things for the world, build products that can improve people's lives, and establish companies that may continue to create more new things in the future." Edison, Jobs, and Musk are just a small part of the leading figures of American startups. America's leading position in startups is largely due to our pioneering spirit, professional ethics, rule of law, strong capital markets, education system, and public sector investment in R&D, which generates competitive innovation. Although startups can redefine old industries and even create new ones in some cases, they face various potential disadvantages from the beginning. Compared with large companies with a large user base and financial resources, startups often face a difficult start. Some old companies may have another advantage: they can allow the government to compete with startups, or implement expensive rules, creating "regulatory barriers to entry." If startups are the lifeblood of American innovation, then all institutions should include promoting competition and innovation in their duties to ensure that these goals become their top priority. 2. SEC should participate in formal rulemaking and provide clear guidance on the classification of digital asset trading When the staff of the U.S. Securities and Exchange Commission (SEC) find it difficult to define which encryption asset transactions are securities, imagine how difficult it is for ordinary users. Due to the lack of clarity, the United States does not have a functioning digital asset market. To solve this problem, the SEC should participate in rulemaking to provide clear guidance to market participants on whether specific digital asset transactions involve the sale of securities, and taking this action will have many impacts. However, since 2019, the SEC has resisted calls to release guidance to the public, choosing instead to conduct enforcement-based regulation, which may harm companies, confuse investors, and disrupt daily users. 3. Eliminate intermediary requirements, Blockchain eliminates the need for third parties The key innovation of Blockchain is the ability to conduct transactions without the need for a centralized third-party intermediary. However, current rules designed for traditional markets default to the existence of centralized intermediaries, such as brokers, clearing organizations, custodians, and market makers. Regulation is appropriate when centralized companies perform these functions. However, treating Decentralization systems in the same way will hinder them from playing similar roles and isolate the benefits these systems provide. This is a form of "technological discrimination." Removing intermediary services can drop risks (such as counterparty risks) and costs (such as transaction fees), while increasing efficiency and promoting competition. If Blockchain technology eliminates the need for intermediaries, regulatory agencies should eliminate intermediary requirements in relevant circumstances. Similarly, by updating existing rules, institutions can help Blockchain fundamentally change our financial system. If existing rules can adapt to transactions on Blockchain, cross-border payments, digital asset trading Settlement, and Derivatives markets can become more efficient. 4. Increase transparency in institutional decision-making processes, strengthen communication with private sector stakeholders, civil society organizations, academia, and the public Increasing transparency in institutional decision-making processes is crucial for formulating reasonable encryption policies. It can build trust, ensure accountability, and allow public participation. Open dialogue with stakeholders will ultimately lead to more effective regulatory solutions: companies work with regulatory agencies to explore these solutions to ensure that regulatory agencies fully understand dynamic market structures and the goals, operations, and risks of companies. When institutions openly share their decision-making processes, it can also prevent undue influence of special interests and help ensure fair policy. Importantly, institutions should encourage (or at least allow) companies to hold educational meetings with regulatory agencies without fear of retaliatory enforcement action. This will help achieve what I call "regulation through dialogue" rather than regulation through enforcement. Transparency allows stakeholders (including innovators and the public) to provide feedback, thereby promoting more wise and inclusive approaches to encryption regulation. 5. Allow White House staff and federal agency employees to adopt Cryptocurrency In 2022, the U.S. Office of Government Ethics issued a legal advisory notice prohibiting "employees holding Cryptocurrency or Stable Coin" from participating in the formulation of Cryptocurrency-related policies and regulations that may affect the value of their assets. The notice applies to all White House staff and federal agency employees and stipulates that the minimum threshold applicable to securities does not apply to Cryptocurrency. Maintaining ethical standards in conflict of interest is important for establishing trust in government actions. However, preventing government employees responsible for formulating Cryptocurrency rules from using Cryptocurrency is like prohibiting Department of Transportation officials from using trains or planes. Government employees responsible for regulating Cryptocurrency should be allowed to use Cryptocurrency. 6. Provide specialized training for government employees In addition to benefiting from interacting with Cryptocurrency, government employees will also...
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a16z senior executives deduce: how will the U.S. government seize the Web3 opportunity after Trump's election?
After Trump's victory in the U.S. presidential election, he returned to the White House in glory. Compared with his previous encryption proposals, how should the pro in the industry view the development opportunities that the U.S. government should seize next? This article is from Brian Quintenz, a16z's policy director, a16z's policy director. The Chinese pro, who has written an article called "Seven things U.S. government agencies can do to help seize the web3 opportunity," compiled, translated, and rewritten by Foresight News. (Previous summary: Preparing for the U.S. election》How did the S&P 500 and BTC perform historically after the past ten elections? ） (Background supplement: Wall Street giant Bernstein: Regardless of who is elected President of the United States, BTC will break through $200,000 in 2025) For a government, formulating effective policies for emerging technologies may be challenging, especially when the technology does not conform to traditional regulatory frameworks. This is the case of Web3, as Decentralization systems are inherently unable to comply with traditional legal requirements. For example, current rules assume the existence of some form of centralized intermediary, while Web3 typically does not have a centralized intermediary. These rules aim to drop the conflicts of interest and information asymmetry caused by trusted centralized entities such as management teams; however, applying such rules to Decentralization systems may force the system to re-centralize, hinder innovation, undermine the transformative potential of Web3, and harm user interests. Decentralization has already reshaped social media, identity management, creative industries, and finance. Although the United States has the highest adoption rate of Cryptocurrency in developed countries, it does not have an effective Decentralization encryption asset regulatory system. While the U.S. has made some progress (such as FIT21 and DUNA in Wyoming), significant legislative progress is still needed to provide regulatory clarity, appropriately encourage Decentralization, and protect consumers. Regardless of who wins the U.S. election, government departments and agencies can take some simple steps (without legislation) to help the United States seize the Web3 opportunity. Here are the seven most important ones. Although this list is not exhaustive, it should help the U.S. government and other stakeholders understand how to move in the right direction. 1. Relevant departments should include promoting competition and innovation in their duties As Marc Andreessen and Ben Horowitz said, the key to U.S. tech dominance has always been startups. They observed: "Startups are a group of brave, rejected and unconventional people who come together with dreams, ambitions, courage, and a special trap of skills to create new things for the world, build products that can improve people's lives, and establish companies that may continue to create more new things in the future." Edison, Jobs, and Musk are just a small part of the leading figures of American startups. America's leading position in startups is largely due to our pioneering spirit, professional ethics, rule of law, strong capital markets, education system, and public sector investment in R&D, which generates competitive innovation. Although startups can redefine old industries and even create new ones in some cases, they face various potential disadvantages from the beginning. Compared with large companies with a large user base and financial resources, startups often face a difficult start. Some old companies may have another advantage: they can allow the government to compete with startups, or implement expensive rules, creating "regulatory barriers to entry." If startups are the lifeblood of American innovation, then all institutions should include promoting competition and innovation in their duties to ensure that these goals become their top priority. 2. SEC should participate in formal rulemaking and provide clear guidance on the classification of digital asset trading When the staff of the U.S. Securities and Exchange Commission (SEC) find it difficult to define which encryption asset transactions are securities, imagine how difficult it is for ordinary users. Due to the lack of clarity, the United States does not have a functioning digital asset market. To solve this problem, the SEC should participate in rulemaking to provide clear guidance to market participants on whether specific digital asset transactions involve the sale of securities, and taking this action will have many impacts. However, since 2019, the SEC has resisted calls to release guidance to the public, choosing instead to conduct enforcement-based regulation, which may harm companies, confuse investors, and disrupt daily users. 3. Eliminate intermediary requirements, Blockchain eliminates the need for third parties The key innovation of Blockchain is the ability to conduct transactions without the need for a centralized third-party intermediary. However, current rules designed for traditional markets default to the existence of centralized intermediaries, such as brokers, clearing organizations, custodians, and market makers. Regulation is appropriate when centralized companies perform these functions. However, treating Decentralization systems in the same way will hinder them from playing similar roles and isolate the benefits these systems provide. This is a form of "technological discrimination." Removing intermediary services can drop risks (such as counterparty risks) and costs (such as transaction fees), while increasing efficiency and promoting competition. If Blockchain technology eliminates the need for intermediaries, regulatory agencies should eliminate intermediary requirements in relevant circumstances. Similarly, by updating existing rules, institutions can help Blockchain fundamentally change our financial system. If existing rules can adapt to transactions on Blockchain, cross-border payments, digital asset trading Settlement, and Derivatives markets can become more efficient. 4. Increase transparency in institutional decision-making processes, strengthen communication with private sector stakeholders, civil society organizations, academia, and the public Increasing transparency in institutional decision-making processes is crucial for formulating reasonable encryption policies. It can build trust, ensure accountability, and allow public participation. Open dialogue with stakeholders will ultimately lead to more effective regulatory solutions: companies work with regulatory agencies to explore these solutions to ensure that regulatory agencies fully understand dynamic market structures and the goals, operations, and risks of companies. When institutions openly share their decision-making processes, it can also prevent undue influence of special interests and help ensure fair policy. Importantly, institutions should encourage (or at least allow) companies to hold educational meetings with regulatory agencies without fear of retaliatory enforcement action. This will help achieve what I call "regulation through dialogue" rather than regulation through enforcement. Transparency allows stakeholders (including innovators and the public) to provide feedback, thereby promoting more wise and inclusive approaches to encryption regulation. 5. Allow White House staff and federal agency employees to adopt Cryptocurrency In 2022, the U.S. Office of Government Ethics issued a legal advisory notice prohibiting "employees holding Cryptocurrency or Stable Coin" from participating in the formulation of Cryptocurrency-related policies and regulations that may affect the value of their assets. The notice applies to all White House staff and federal agency employees and stipulates that the minimum threshold applicable to securities does not apply to Cryptocurrency. Maintaining ethical standards in conflict of interest is important for establishing trust in government actions. However, preventing government employees responsible for formulating Cryptocurrency rules from using Cryptocurrency is like prohibiting Department of Transportation officials from using trains or planes. Government employees responsible for regulating Cryptocurrency should be allowed to use Cryptocurrency. 6. Provide specialized training for government employees In addition to benefiting from interacting with Cryptocurrency, government employees will also...