a16z urges the US Treasury to exempt decentralized stablecoins from regulation under the GENIUS Act

According to ChainCatcher, as reported by The Block, a16z's crypto division recently sent a letter 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 oversight.

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 recommended adopting the decentralized framework from the 2025 Digital Asset Market Clarity Act and proposed leveraging decentralized digital identity as an innovative solution to combat illicit finance, highlighting that technologies such as zero-knowledge proofs can enable secure identity verification while protecting personal data.