16z Encryption Supervision System Proposal to Understand in One Article

In August this year, Pat Toomey, a senior member of the US Senate Banking Committee, proposed to solicit ideas and legislative suggestions on the best regulatory methods for encryption and blockchain. The proposal submission time is August 26 to September 27. This week, the well-known venture capital firm Andreessen Horowitz (a16z) submitted a consumer protection proposal in response to Pat Toomey’s appeal. The proposal is based on the “Consumer Financial Protection Law”, based on an easy-to-understand regulatory system based on information disclosure. At the same time, the proposal also requires the DAO to grant legal rights similar to standard registered entities, including tax requirements and It is allowed to open bank accounts and sign legal agreements, etc. 

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In fact, a16z has proposed a total of four encryption supervision system proposals. These four proposals include four areas in which the U.S. government can manage cryptocurrency and blockchain technology, and also represent four in the field of decentralized finance (DeFi) The key issues are: Decentralized Autonomous Organization (DAO), decentralized/overlapping supervision, consumer protection, tax reporting to improve the clarity of specific blockchain ecosystems. Each of them exists independently, but these proposals combined can represent a comprehensive approach to regulation, supervision, and taxation in a decentralized environment.

First of all, decentralized autonomous organizations are a new method of managing and coordinating human activities. However, in performing basic organizational functions, decentralized autonomous organizations still lack uniform legal recognition, such as signing legal agreements and restricting decentralized autonomy. Organize member responsibilities, file tax returns, open bank accounts, etc. a16z mentioned in the proposal to integrate existing laws related to unincorporated organizations and tax reporting status to create a lightweight framework around the off-chain legal status of decentralized autonomous organizations. In addition, a16z also provides many Coordinating the federal agencies’ supervision of decentralized autonomous organizations.

Second, decentralization and overlap have led to inefficiencies in the regulatory process. Regulatory agencies use inconsistent methods when supervising agencies, and there are differences in the level of protection provided to consumers. Therefore, a16z recommends that the US Congress consider ways to change the traditional financial regulatory structure to reduce management fragmentation and overlap. a16z suggested the costs and benefits of three methods for reference and comparison by the US Congress: the establishment of a non-profit company to be responsible for the technical supervision and standard setting of decentralized technologies, similar to the Internet Corporation for Assigned Names and Numbers (ICANN); Establish an industry self-regulatory organization, preferably a multi-party industry self-regulatory organization; coordination of jurisdictions among institutions. For innovators and regulators, it is a challenge to “harden” decentralized technology into the traditional financial regulatory framework. Therefore, in terms of decentralized/overlapping supervision, it is necessary to compare jurisdictional coordination, SRO and non-profit companies.

Third, in terms of consumer protection and inclusion, as the number of decentralized projects continues to increase and these projects increasingly become an indispensable part of the US economy, policymakers need to develop a cohesive strategy to promote the protection industry consumer. The proposal creates a simple disclosure-based regulatory system based on the Consumer Financial Protection Law. By providing a standardized information disclosure system for these projects, it can ensure that consumers obtain the information needed to participate in such projects, and further enhance supervision. Clarity.

Finally, there is the tax report of the blockchain ecosystem and related issues. The tax and regulatory environment in the United States is designed for the operation of centralized institutions, but as mentioned in the current infrastructure bill pending in Congress, many actors who are unable to comply with the bill will be required to impose tax reports. In fact, a16z raised this issue with the U.S. Senate leadership earlier this year. This time it specifically pointed out in the proposal that the tax report and related issues are based on the infrastructure bill and other legislative work that has already been carried out. Clarify reasonable tax rules related to digital assets.

In addition, a16z also hopes to strengthen decentralized/overlapping supervision and proposes three methods, including:

1. Establish an industry self-regulatory organization

2. Jurisdiction between coordination agencies

3. Establish a non-profit organization for technical supervision

Not only that, a16z also reiterated the relevant comments made in August on the U.S. infrastructure bill pending in Congress in its proposal. The venture capital stated that the U.S. tax and regulatory environment is designed for the operation of centralized institutions. However, as mentioned in the current infrastructure bill pending in Congress, many actors who are unable to comply with the bill will be required to impose tax reports.

Of course, this proposal is only a small part of the ongoing dialogue with policy makers, civil society leaders, and other stakeholders. A16zi expressed that they also expect people to do more on how a16z can jointly advance decentralized technologies and policies. Priority feedback.

Summarize

In view of the rapid innovation in the third-generation Internet Web 3 field, it is difficult for many policy makers to keep up with the pace of industry development. If the United States wants to maintain innovation and ensure financial advantages, business leaders and policy makers need to work closely to ensure the private sector It can be tested and constructed, and an appropriate regulatory system can help manage downside risks that may harm individual interests. So when I heard the US Senate Banking Committee called for feedback on clarifying the law on digital assets and decentralized technology, a16z was very encouraged and happy.

a16z actively responded to the call of the US Senate Banking Committee and believed that the only viable way forward for the United States is bipartisan cooperation. Therefore, it shared relevant ideas with each senator of the US Senate Banking Committee for review. Not only that, a16z expressed that in the spirit of openness and transparency, it also hopes to share these suggestions and opinions with the wider community, and looks forward to helping to promote the dialogue around the future of digital asset legislation and supervision.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/16z-encryption-supervision-system-proposal-to-understand-in-one-article/
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