On a global scale, crypto has received diverse receptions from absolute ban to tax on returns and acceptance as legal tender for bitcoin. But for the year 2023 and beyond, these different government institutions with diverse views of crypto will come up with regulations as guides for the crypto industry, a16z crypto said in a report.
The report highlighted the feedback from top officials in the US on their concerns about crypto and how the government needs to be proactive. Senator Kirsten Gillibrand, a junior United States senator from New York, said that due to the enormous growth potential and benefits digital assets, blockchain technology, and cryptocurrencies promise, it is crucial “that the United States plays a leading role in developing policy to regulate new financial products, while also encouraging innovation and protecting consumers.”
In support of the Senator’s assertion, Brian Armstrong, CEO and Founder of Coinbase explained that America’s position in leading the development of digital currency is a rare opportunity that can be lost if no action is taken.
Pending Crypto court cases
a16z crypto added that pending court cases such as SEC Ripple Enforcement Action, Treasury Tornado Cash Civil Actions, CFTC Ooki DAO Enforcement Action, CeFi Bankruptcy Actions (e.g. Voyager, Celsius, FTX), SEC Wahi Enforcement Action (Coinbase insider trading), CFTC/SEC Eisenberg Enforcement Action (Mango Markets fraud), and SEC Terraform Labs/Do Kwan Enforcement Action will determine to a large extent how crypto regulation will pull through.
The report also revealed that there are pending rules from the Whitehouse as it pertains to the workings of crypto. Proposed SEC Custody Rule, FinCEN Unhosted Wallet & Travel Rules, IRS Tax Rules and Form Changes, and Ongoing interactions between industry and government agencies are a list of them.
Internet, big tech, and social media
In addition to the predictions given by a16z crypto, it was stated clearly that while the internet will continue to grow and reveal the power Big tech companies have, the relevance of Web3 will become more eminent.
Although it is known that three companies – Facebook, Google, and Twitter – generate a third of all global web traffic while five companies represent 50% of the total market cap of the top 100 firms of the Nasdaq, a change to a more democratic economic system is coming. And this will be driven by the advantage of decentralized platforms where “users have more power, and earn a greater share of revenue,” compared with Web2 platforms.
a16z crypto added that the need for decentralized social media platforms will escalate in the future as well.
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