a16z calls on the U.S. Treasury to exempt decentralized stablecoins from the regulation of the GENIUS Act

According to The Block, a16z's crypto division recently wrote to U.S. Treasury Secretary Scott Bessent, urging for a clear definition of the GENIUS stablecoin bill and advocating that decentralized stablecoins should be exempt from regulatory scope.

The company cited LUSD, which is backed by Ethereum collateral, as an example, emphasizing that such stablecoins are issued through autonomous smart contracts without a central controlling entity. a16z also suggested adopting the decentralized framework from the 2025 Digital Asset Market Clarity Act and proposed using decentralized digital identity as an innovative solution to combat illicit finance, highlighting that technologies like zero-knowledge proofs can enable secure identity verification while protecting personal data.