Venture Capitalist Andreessen Horowitz to Advance Crypto Policy in Washington

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Venture capital firm Andreessen Horowitz will be sending several executives to Washington, DC this week to explain to executives on Capitol Hill and the White House why they should regulate the next generation of the Internet.

The company, commonly known as a16z, is a major investor in crypto and other technologies that rely on decentralized models and make up what it calls web3. Anthony Albanese, chief operating officer of a16z Crypto, and Katie Haun, general partner and former federal prosecutor, will be among the executives who will be traveling this week to meet with government stakeholders, the company exclusively told CNBC.

While not disclosing which officials the leaders will meet, the a16z Crypto team said those meetings would include “key leaders in the White House, executive agencies, regulators, the House and the Senate.”

Andreessen Horowitz is a historic Silicon Valley venture capital firm investing in successful tech companies including Airbnb, Facebook, Lyft, and Slack. The company has announced three funds dedicated to crypto and Web3, for a total of $ 3.1 billion, although it has not disclosed the amount invested to date.

The team will promote Andreessen Horowitz’s vision for successful regulation of the next generation of the web. He laid out this agenda in a report released Wednesday, defining web3 as “a group of technologies that encompass blockchain, crypto protocols, digital assets, decentralized finance, and social platforms.”

While policymakers are still grappling with the challenges of Web 2.0, which is largely marked by the rise of social media, a16z believes moving forward can help address these issues while preparing for future challenges. .

“Web3 represents the alternative to a digital status quo that is frankly broken,” Tomicah Tillemann, global policy chief of a16z, told CNBC on Tuesday. “Web3 is the alternative, it is the solution we were waiting for. It is the answer to the challenges that have emerged from the web2. And for this reason, it is absolutely essential that policy makers begin to take the necessary steps to secure this right. “

Tillemann, who told CNBC he owns cryptocurrencies, mostly bitcoin and ethereum, highlighted current issues such as industry consolidation and data breaches, which blockchain advocates say , can be helped by the decentralized nature of the new technology.

In the agenda released on Wednesday, a16z suggests that these new technologies can provide a more secure digital infrastructure and advance economic opportunities. The report urges policymakers to create a national strategy for these technologies, determine appropriate regulations based on the risk of different types of products, and consider collaborating among agencies to regulate beyond the Securities and Exchange Commission.

Tillemann said that one day it might make sense for a new agency to rule this rising class of tech.

“In the short term, there are agencies like the Consumer Financial Protection Bureau that are well suited to address some of the fraud and consumer protection concerns that have been voiced by policymakers in the space.” , did he declare. “In the longer term, there is probably a very good case for creating a regulatory architecture suited to 21st century goals. “

Yet change in Washington often moves slowly. Federal lawmakers have spent years trying (and failing) to pass basic digital privacy legislation, while lagging behind Europe and many US states. And several progressive groups claim that digital players like Amazon, Apple, Facebook and Google have amassed too much power because courts and regulators have relied on outdated interpretations of the law. These companies say, however, that they face stiff competition.

But the first step is to make sure that policymakers are aware of the challenges ahead, according to Tillemann.

“There are probably few areas that will be more important in determining a country’s long-term success in the 21st century than the quality of its digital infrastructure,” he said. “And in the United States right now, we’re not only losing this race, but it’s not clear that many of our policymakers even recognize that there is a competition going on.”

This summer’s debate around a cryptocurrency industry tax reporting requirement in the infrastructure package, however, helped focus the attention of lawmakers on the technology. Concerned voters flooded lawmakers’ phone lines asking them to correct what they saw as problematic language in the bill that would put undue strain on the industry.

But Tillemann said Web3 regulation goes far beyond cryptocurrencies. It also includes discussions on non-fungible tokens (NFTs), internet connectivity, and data storage.

“We also have to recognize that this is much broader than just digital assets,” Tillemann said. “This is the future of the Internet.”

-Ylan Mui of CNBC contributed to this report.

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