a16z crypto has released a Q&A-style article based on a recent video discussion between Andreessen Horowitz co-founder Marc Andreessen and a16z crypto founder Chris Dixon, arguing that the proposed CLARITY Act is needed because the U.S. crypto sector has grown far beyond its early niche status while federal rules remain incomplete.
The article says passage of the bill would give businesses a durable operating framework and provide blockchain systems with clearer ground rules, replacing years of uncertainty that, in a16z’s view, have both slowed innovation and left consumers exposed to risk.
Why a16z says current U.S. crypto rules are still incomplete
The firm frames crypto as an industry that has already matured. According to the article, stablecoins now handle trillions of dollars in transactions each year, at a scale comparable to the Visa network. Banks, asset managers, card networks, and fintech companies are building products tied to stablecoins, tokenized stocks, tokenized deposits, and other digital assets. It also points to improvements in blockchain infrastructure, saying transactions that once cost several dollars can now settle in under a second on widely used blockchains for less than one cent.
a16z says U.S. crypto regulation is currently split in two parts: stablecoins and everything outside stablecoins. The GENIUS Act, which took effect in July 2025, established a federal framework for stablecoins. But the blockchain networks and trading markets that stablecoins rely on still do not have a complete federal regulatory regime.
Andreessen said, “We’re not trying to game the system, and we’re not here asking for subsidies, protectionism, or some other form of support. We just want a long-term stable framework so people can operate responsibly. To me, that’s a pretty natural ask on a lot of levels.”
The article argues that agency guidance can fill some gaps, but cannot replace legislation. Guidance can change when agency leadership changes or when a new administration takes office. For businesses deciding whether to commit to products that may take five years or even 10 years to pay off, the key questions are what the rules are, which regulator has jurisdiction, and whether a product built today will still be lawful tomorrow.
That is the core of a16z’s case for the CLARITY Act: a statutory framework rather than shifting interpretation alone.
Consumer protection and oversight of trading platforms sit at the center of the bill
On consumer protection, the article argues that one of the most basic problems in crypto markets is that trading platforms are not subject to the same kind of complete federal regime that already applies to major securities and commodities venues such as the New York Stock Exchange and Nasdaq.
It says those traditional venues operate under clear federal oversight, while crypto trading platforms still lack a market-wide structure covering registration, supervision, audits, disclosure, trade monitoring, and customer asset protection. The CLARITY Act, as described in the article, would create a clearer path for digital assets to move from SEC oversight to CFTC oversight.
Federally registered crypto trading platforms would face audit and financial control requirements. They would have to safeguard customer assets, follow anti-fraud and insider trading rules, and provide operating information to regulators. Companies that refuse to meet those standards would not be able to legally operate in the United States.
a16z links that framework to the failures seen in FTX. The article says that, according to allegations, FTX moved funds among affiliated entities, had weak internal controls, and did not actually hold the amount of customer assets it claimed to hold. Federal regulation, it says, cannot guarantee that fraud never happens, but it can make fraud harder to hide and give regulators a chance to act before problems become catastrophic.
Andreessen said, “You need a system first. Companies need risk controls, compliance, and audits... We need that to stop disasters too, and to avoid more FTXs.”
The article extends the same logic to products sold as “stablecoins.” It cites Terra-Luna as a case that was marketed as a stable asset without dollar reserves or other stable reserve assets backing it. Under a stablecoin regulatory framework, compliant dollar stablecoins must be fully backed by appropriate reserves and audited. a16z says the CLARITY Act would bring similar discipline to other parts of the crypto market.
a16z argues regulatory ambiguity rewards offshore actors
The piece says vague rules create a race to the bottom.
In its telling, a U.S. company that takes compliance seriously may have to spend heavily on lawyers, internal controls, audits, sanctions screening, and customer protection. That work is expensive and can slow product development. Offshore rivals can skip those costs, copy the product, charge less, and move faster, with speed coming precisely from not doing compliance work.
Dixon said, “Right now, it’s extremely unclear which rules apply to which entities. I’ve come to believe that when there are gray areas in regulation, markets usually race to the bottom... and that ambiguity ends up benefiting bad actors.”
a16z says the result is that uncertainty punishes responsible companies while benefiting offshore competitors. Law-abiding U.S. exchanges bear the full cost of compliance, while non-compliant offshore platforms may continue serving U.S. users.
As the firm describes it, the CLARITY Act would draw the boundaries: which firms count as intermediaries, which rules apply to them, which regulator oversees them, and what happens if they refuse to comply. Any company that holds customer funds or helps complete financial transactions would have to follow the same type of anti-money-laundering, sanctions, and Treasury rules that apply to similar financial intermediaries such as payment providers and fintech firms.
The article’s line is straightforward: clear rules favor firms willing to meet the standard; gray zones favor those looking for loopholes.
Sanctions enforcement, public blockchains, and the privacy line
On sanctions enforcement, a16z draws a distinction between privacy and concealment. The article says many public blockchains are often described as anonymous systems, but in practice offer substantial transparency because transactions are permanently recorded on public ledgers.
Wallet addresses do not directly display legal names, but investigators can trace fund flows and connect activity to exchanges, accounts, devices, or other identity data. Those records remain available years later, which means law enforcement may find evidence in the future that did not exist at the moment a transaction took place.
The article contrasts this with payment methods that leave no public trail and says blockchains can preserve a traceable path. It adds that some national security officials have described crypto transactions as creating a record “for future prosecution.”
Dixon said, “It applies the same anti-money-laundering and Treasury rules that apply to other market intermediaries to crypto intermediaries as well.”
Still, the piece says traceability and privacy are not the same thing. A person should not have to disclose every medical payment or transfer to the entire world simply because they use a blockchain. In a16z’s view, the existing financial system already accepts that ordinary people need privacy, while regulated institutions must still meet sanctions and AML obligations.
To make that argument, the article looks back to early debates over internet encryption. Strong encryption was once treated as a threat because criminals could use it, and in export controls it was at times grouped with military technology. Yet a16z says encryption is what made secure banking, e-commerce, and confidential communications possible.
Andreessen said, “Is encryption bad because bad people use encryption to do bad things? Or is encryption valuable in itself because it is the foundation for trust, for commerce, and for law-abiding citizens at home and abroad to cooperate and do business with each other?”
The article says blockchain privacy raises the same dividing line: privacy can protect lawful activity, while concealment aimed at evading the law should still be pursued by enforcement authorities.
How the bill approaches stablecoin rewards and bank concerns
The article says banks have argued that stablecoin issuers and wallet providers should not be allowed to recreate deposit-like accounts outside the banking system by paying interest on balances. Their concern is that consumers could move deposits out of banks and into stablecoin products, reducing funding available for bank lending.
a16z says the CLARITY Act addresses that concern by prohibiting interest on stablecoin balances and also banning products that are functionally or economically equivalent to interest-bearing accounts.
At the same time, the bill would still allow rewards based on transaction activity. Wallet providers or retailers could reward customers for shopping with stablecoins in much the same way that credit cards offer points or retailers run loyalty programs. The distinction, as described in the article, is that one rewards spending behavior while the other pays returns simply for holding a balance.
The firm says this compromise largely addresses the core concern raised by banks without banning ordinary rewards programs. It also notes that many current rewards programs run by card networks, payment apps, and retailers follow a similar model.
The article then points out that the same banks raising these issues are also adopting blockchain technology. It names Goldman Sachs, Fidelity, BlackRock, Stripe, Wells Fargo, and JPMorgan as large financial institutions that have already developed or supported blockchain products.
Dixon said, “One of the things blockchain changes for finance is that it provides a common framework so everyone can say, ‘Okay, we’re moving into the 21st century together.’ So it solves not just a technology problem, but a coordination problem.”
a16z says banks and crypto companies are seeing the same opportunity: existing financial infrastructure is fragmented and difficult to modernize. Blockchain offers a shared framework that can reduce layers of intermediation, let institutions settle assets on common infrastructure, and support modernization without requiring each bank to rebuild a separate system and then connect it to everyone else’s.
Developer liability and the open-source question
On software developers, the article says the CLARITY Act separates two different situations: knowingly helping someone commit a crime and publishing general-purpose software.
Developers who build tools for criminal use, market tools to criminals, or directly assist unlawful conduct would still face liability. What the bill rejects, a16z says, is the idea that developers should carry unlimited responsibility for every downstream use they cannot foresee or control.
Open-source code can be copied, modified, and deployed by people the original developer has never met, including in settings the author never imagined. If developers were made liable for all of those uses, the article argues, open-source software would become extremely difficult to build and fund.
Andreessen said, “That’s impossible, and it would make software development impossible, because no developer can predict how software will be used in the future. You don’t even have to look at it through the lens of software. The same is true for any product. If I run a hotel and a criminal checks in and plans a crime there, does that make me a co-conspirator?”
The article says the issue reaches beyond crypto. Academic research, startups, venture capital, and open AI models all depend on open-source software. In a16z’s framing, the workable line is intent plus actual participation: people who knowingly assist crimes should be liable, while developers of neutral tools should not automatically be liable because others later misuse them.
The bill’s approach to securities law and decentralization
a16z makes clear that putting a security on a blockchain does not automatically turn it into something other than a security. A tokenized stock is still a stock and remains under SEC oversight. A company cannot avoid disclosure, registration, and investor protection requirements simply by moving an asset on-chain or calling it a token.
Dixon said, “What the CLARITY Act does is write that into law and provide clear definitions. That way people can know exactly where they stand instead of having to litigate every time to find out.”
The harder issue, the article says, is how to regulate digital assets tied to blockchain networks whose character can change as those networks evolve. a16z describes the bill as setting out a risk-based framework.
A new blockchain network often begins with a centralized actor, such as founders, a company, or a small team. Those actors may control the network, hold information the public does not have, and make decisions that affect token value. At that stage, the related asset would fall under SEC oversight and face security-like requirements, including disclosure, insider restrictions, and lockup periods for founders and early investors.
As the network develops, control may become more distributed. If it reaches the decentralization threshold specified in the bill, the asset may come to look more like a commodity than a corporate security. At that point, oversight would shift to the CFTC.
The article stresses that this would not mean the asset becomes unregulated. Commodity regulation still addresses fraud, market manipulation, and cornering. The regulator changes, a16z says, because the nature of the asset changes.
The bill would also add constraints that are not clearly defined today. While a network remains under centralized control, founders, venture firms, and other insiders could face longer lockups and stricter disclosure obligations. The purpose, according to the article, is to prevent insiders from selling into the market before ordinary participants have equal information or before the product has developed into a sufficiently decentralized network.
What happens if the CLARITY Act does not pass
a16z says crypto regulation would not disappear if the bill fails. The SEC, the CFTC, and the U.S. Treasury have already been issuing guidance and using existing authority to make rules within their jurisdictions, and the firm says that would probably continue.
The problem, in its account, is that agency interpretations can change after elections or leadership transitions. Companies may spend years building under one expected rule set only to find themselves facing a very different interpretation after a new administration or a change at the top of an agency.
Dixon said, “If the rules under your feet keep changing, companies are naturally going to be less willing to put a lot of time and money into building.”
a16z adds that the uncertainty affects more than investment. It also affects consumer protection, because a durable framework can define regulators’ powers and require companies to register, disclose information, protect customer assets, and follow market rules. Without legislation, those obligations remain scattered across different systems and vulnerable to dispute.
The article says the industry has already lived through years of aggressive enforcement and political hostility, and the more likely outcome is not that the sector vanishes, but that companies continue moving elsewhere. If that happens, U.S. authorities would have less practical oversight. Regulators would find it harder to supervise offshore firms, law enforcement would have a harder time reaching them, and those firms would have less incentive to build around U.S. standards.
a16z ties the bill to U.S. technological leadership
Andreessen and Dixon also connect the CLARITY Act to a broader question: where the technology will be built, which firms will lead it, and whose rules will shape it. The article says that once a technology is invented, it generally does not disappear. The real question is where it develops.
a16z argues that for more than a century, the United States has benefited when major technologies were born and scaled domestically. Technology leadership brings companies, jobs, tax revenue, and expertise. It also provides economic resources for national priorities and creates security advantages.
Andreessen said, “Regardless of political views, every American citizen should want America to be the global technology leader.”
The article points to the history of strong encryption. When the United States restricted its export, foreign competitors did not stop developing it. They built products outside the country, and users shifted to those products. Only after those restrictions changed were U.S. companies able to help build the secure internet economy.
a16z says blockchain raises the same issue now. Future financial systems, technical standards, and leading companies will emerge somewhere. If most of that development happens overseas, the United States would lose both economic opportunity and regulatory influence.
In the firm’s view, the CLARITY Act would give responsible businesses a reason to build under U.S. law, which would benefit consumers, law enforcement, and national security while helping the country take part in setting standards for the next generation of financial infrastructure.
Supporters cited by a16z include lawmakers, police groups, banks, and tech firms
The article closes by listing several categories of backers for the CLARITY Act, saying support includes lawmakers, law enforcement organizations, financial institutions, and technology companies.
a16z says the legislation is the product of years of bipartisan work in Congress aimed at creating a federal framework for digital asset markets. It also notes that the Fraternal Order of Police, which it describes as the largest law enforcement organization in the United States, has backed the bill and pushed back on claims that it would weaken sanctions or AML enforcement.
Dixon said, “The Fraternal Order of Police just announced support for the CLARITY Act. It’s the largest law enforcement organization in the United States.”
Support also comes from the financial sector, the article says. Goldman Sachs CEO David Solomon has endorsed the CLARITY Act, while other financial institutions and fintech companies are already developing blockchain products.
a16z argues that backing from these different groups shows a growing consensus that the United States needs a clear and enforceable rule set for digital asset markets. When market rules are unclear, consumers do not know what protections they have, responsible firms carry high compliance costs, and offshore rivals can bypass those obligations.
The article ends by saying the real comparison is not between the CLARITY Act and some hypothetical alternative law, but between the regime the bill would create and the current state of affairs. In a16z’s framing, giving responsible firms a clear path to operate would strengthen consumer protection, support enforcement, and improve the odds that the next generation of financial technology is built in the United States.