6 policy proposals from Andreessen Horowitz for the future of crypto

"Web3 isn't just a new wave of innovation. It's an opportunity for a reset."


A16z says Web 3, as crypto is referred to, is "an opportunity for a reset."

Image: Protocol

Calling crypto the third wave of the Web revolution, Andreessen Horowitz outlined Wednesday what it thinks policymakers should do to adapt to the fast growing technology trend.

The Silicon Valley venture firm's policy proposal turns the spotlight on a fresh wave of disruptive technologies, including blockchain, cryptocurrencies and NFTs, which have drawn intense scrutiny from regulators and policy makers.

Those debates are raging amid heightened criticism of Big Tech, triggered by growing concerns over privacy and misinformation on social media platforms, referred to as Web 2.0.

"Few would debate that Web 2.0 — social media and today's large tech platforms — took a wrong turn along the way," the 35-page paper, titled "How to Win the Future: An Agenda for the Third Generation of the Internet," argued.

Web3, as crypto and other blockchain technologies are often referred to, offers a new approach to reshape the web and the tech industry, the a16z paper said. The VC firm has more than $3 billion under management across three funds focused on crypto companies.

"Web3 isn't just a new wave of innovation," the paper said. "It's an opportunity for a reset."

Here are six key takeaways from the a16z crypto proposals:

Policymakers have an important role to play.

Crypto grew rapidly based on decentralized networks. But government must now play a role in defining the way forward. "Policymakers should be leading the conversation and setting a broad vision for the future of U.S. digital infrastructure, not merely reacting to private sector and international developments such as China's digital renminbi," the a16z paper said.

"Leaders in the United States have two options: assume the responsibility of shepherding web3 innovation in a manner that's consistent with the country's values, or cede this role to others with a different, divergent set of priorities."

It's time to rethink the SEC.

The Securities and Exchange Commission, especially under new chair Gary Gensler, has played an increasingly high-profile role in scrutinizing the crypto industry. That's probably not going to work, the paper argues.

"It is time to look beyond the SEC as a catch-all regulator, establish cross-agency groups where appropriate, and consider whether a tailored and comprehensive approach to the regulation of digital infrastructure may be needed."

Disclosure rules need to be changed for the 21st century.

Regulations on disclosures helped create "efficient, safe capital markets" in the 20th century. But many of these rules are "not well designed to address" the way crypto and Web3 platforms work, according to the paper. "A Web3 platform could, for instance, generate financials and operating reports hourly instead of quarterly. New disclosure standards that focus on consumer understanding rather than strict technical adherence to legacy rules could take advantage of such capabilities."

The IRS should work with the crypto industry on new taxation rules.

The proposed infrastructure bill featured a heated debate over how crypto traders and miners should be taxed. And the a16z paper also complained that "the IRS has been slow to give consumers and businesses the basic guidance they need to comply with tax reporting obligations." The a16z paper said "policymakers should push the IRS to collaborate with the sector to implement solutions that leverage the technological leap forward offered by Web3."

Don't get fixated on crypto energy consumption.

Crypto skeptics and critics point to the massive energy consumption involved in bitcoin mining to highlight the industry's impact on the environment. But most Web3 projects use energy-efficient protocols, the a16z said. "Rather than fixating on bitcoin's energy consumption as an excuse to dismiss the potential of the whole industry, policymakers should embrace the value of web3 platforms to support sustainability objectives."

Don't dismiss stablecoins -- embrace them.

SEC Chair Gary Gensler recently compared stablecoins to poker chips. That's a mistake, according to the a16z viewpoint.

Policymakers "should embrace responsibly regulated stablecoins," the paper said. In fact, the U.S. can build on "the existing, thriving ecosystem of private USD-denominated stablecoins" to prevail in what it sees as "the emerging geopolitical arms race in financial innovation." China is a key rival in this competition. The U.S. "should condemn the surveillance authoritarianism embodied in China's digital renminbi project—not attempt to imitate it."


How the internet got privatized and how the government could fix it

Author Ben Tarnoff discusses municipal broadband, Web3 and why closing the “digital divide” isn’t enough.

The Biden administration’s Internet for All initiative, which kicked off in May, will roll out grant programs to expand and improve broadband infrastructure, teach digital skills and improve internet access for “everyone in America by the end of the decade.”

Decisions about who is eligible for these grants will be made based on the Federal Communications Commission’s broken, outdated and incorrect broadband maps — maps the FCC plans to update only after funding has been allocated. Inaccurate broadband maps are just one of many barriers to getting everyone in the country successfully online. Internet service providers that use government funds to connect rural and low-income areas have historically provided those regions with slow speeds and poor service, forcing community residents to find reliable internet outside of their homes.

Keep Reading Show less
Aditi Mukund
Aditi Mukund is Protocol’s Data Analyst. Prior to joining Protocol, she was an analyst at The Daily Beast and NPR where she wrangled data into actionable insights for editorial, audience, commerce, subscription, and product teams. She holds a B.S in Cognitive Science, Human Computer Interaction from The University of California, San Diego.

Businesses are evolving, with current events and competition serving as the catalysts for technology adoption. Events from the pandemic to the ongoing war in Ukraine have exposed the fragility of global supply chains. The topic of sustainability is now on every board room agenda. Industries from manufacturing to retail and everything in between are exploring the latest innovations like process automation, machine learning and AI to identify potential safeguards against future disruption. But according to a recent survey from Boston Consulting Group, while 80% of companies are adopting digital solutions to navigate existing business challenges or opportunities like the ones mentioned, only about 30% successfully digitally transform their business.

For the last 50 years, SAP has worked closely with our customers to solve some of the world’s most intricate problems. We have also seen, and have been a part of, rapid accelerations in technology in response. Across industries, certain paths have emerged to help businesses manage the unexpected challenges over the last few years.

Keep Reading Show less
DJ Paoni

DJ Paoni is the President of SAP North America and is responsible for the strategy, day-to-day operations, and overall customer success in the United States and Canada. Dedicated to helping customers become best-run businesses, DJ has established himself as a trusted advisor who places a high priority on their success. He works with many of SAP North America's 155,000 customers and helps them adopt business and technology best practices across 25 different industries.


How I decided to exit my startup’s original business

Bluevine got its start in factoring invoices for small businesses. CEO Eyal Lifshitz explains why it dropped that business in favor of “end-to-end banking.”

"[I]t was a realization that we can't be successful at both at the same time: You've got to choose."

Photo: Bluevine

Click banner image for more How I decided series

Bluevine got its start in fintech by offering a modern version of invoice factoring, the centuries-old practice where businesses sell off their accounts receivable for up-front cash. It’s raised $767 million in venture capital since its founding in 2013 by serving small businesses. But along the way, it realized it was better to focus on the checking accounts and lines of credit it provided customers than its original product. It now manages some $500 million in checking-account deposits.

Keep Reading Show less
Ryan Deffenbaugh
Ryan Deffenbaugh is a reporter at Protocol focused on fintech. Before joining Protocol, he reported on New York's technology industry for Crain's New York Business. He is based in New York and can be reached at

The Roe decision could change how advertisers use location data

Over the years, the digital ad industry has been resistant to restricting use of location data. But that may be changing.

Over the years, the digital ad industry has been resistant to restrictions on the use of location data. But that may be changing.

Illustration: Christopher T. Fong/Protocol

When the Supreme Court overturned Roe v. Wade on Friday, the likelihood for location data to be used against people suddenly shifted from a mostly hypothetical scenario to a realistic threat. Although location data has a variety of purposes — from helping municipalities assess how people move around cities to giving reliable driving directions — it’s the voracious appetite of digital advertisers for location information that has fueled the creation and growth of a sector selling data showing who visited specific points on the map, when, what places they came from and where they went afterwards.

Over the years, the digital ad industry has been resistant to restrictions on the use of location data. But that may be changing. The overturning of Roe not only puts the wide availability of location data for advertising in the spotlight, it could serve as a turning point compelling the digital ad industry to take action to limit data associated with sensitive places before the government does.

Keep Reading Show less
Kate Kaye

Kate Kaye is an award-winning multimedia reporter digging deep and telling print, digital and audio stories. She covers AI and data for Protocol. Her reporting on AI and tech ethics issues has been published in OneZero, Fast Company, MIT Technology Review, CityLab, Ad Age and Digiday and heard on NPR. Kate is the creator of and is the author of "Campaign '08: A Turning Point for Digital Media," a book about how the 2008 presidential campaigns used digital media and data.


Russian cyberattacks against the US may still be coming, experts say

In response to strong sanctions and military aid to Ukraine, Russia was expected to launch disruptive cyberattacks against the West but never did. But a cyberescalation from Russia still remains possible, as soon as later this year, according to experts.

"I fear this is a 'calm before the storm' situation," said Chester Wisniewski, principal research scientist at Sophos.

Illustration: Nanzeeba Ibnat/iStock/Getty Images Plus

In the four months since its invasion of Ukraine, Russia hasn't intensified its usual pattern of cyberattacks against the U.S. and Western Europe in response to sanctions and Ukrainian military aid, as many expected. But that doesn't mean the risk of escalation with the West is gone, numerous experts told Protocol.

In other words, don't lower your shields just yet.

Keep Reading Show less
Kyle Alspach

Kyle Alspach ( @KyleAlspach) is a senior reporter at Protocol, focused on cybersecurity. He has covered the tech industry since 2010 for outlets including VentureBeat, CRN and the Boston Globe. He lives in Portland, Oregon, and can be reached at

Latest Stories