The United States is dragging its feet on crypto policy. Besides, the industry participants hope the United Kingdom will not follow suit and become a crypto Grinch.
That’s according to Andreessen Horowitz (a16z), one of the most active investors in the Web3 industry. The corporation is concerned that the US is suffocating crypto. That puts a huge danger on enterprises throughout the digital asset sector.
A16z’s crypto arm made a statement in a recent letter to the UK Treasury. They think outlining how a “one-size-fits-all” approach to regulation would be ineffective.
A16z Crypto recommends counting the varied risks associated with each form of crypto asset in advance.
Imposing constraints on Web3 projects may hinder innovation in the UK’s crypto business. Therefore, the country strives to become a prominent Web3 hub. The letter was a response to the UK government’s call for comment on cryptocurrency policy. It was released on February 1.
The UK government stated that it wished to regulate crypto assets. The related activities require stabilization in a way similar to that of traditional financial services. It solicited feedback on the issue from individuals and firms active in the cryptocurrency sector.
According to a16z, the US Securities and Exchange Commission’s uneven application of the Howey Test produces much misunderstanding. Such an approach is not nice for anyone in the sector. The commission deemed the Howey Test “impractical to apply.”
Demands for a clear crypto policy in the UK
Some cryptocurrency players are developing the so-called “protocols and launching crypto assets that are falsely marketed as “decentralized.” However, they are, in fact, centralised and involve trust.
Nonetheless, a16z believes the UK can implement a “principles-based approach to decentralization” that promotes crypto adoption and Web3 innovation while protecting consumers.
The letter also urged that if the UK wants Web3 firms to thrive, they should be permitted to decentralize within a reasonable legal framework.
This includes enabling them to distribute crypto assets freely. Moreover, they can exchange them on secondary marketplaces without unreasonable obstacles.
Polygon Labs also reacted to the call for feedback on Monday. According to the main narrative, distinguishing between genuinely supported crypto assets and those that aren’t is critical.
Unbacked crypto assets, such as bitcoin and ether, derive value from their powering function. Therefore, they need to orient towards safeguarding a blockchain network rather than being tied to an external asset.