A16z crypto, the digital currency branch of Andreessen Horowitz, has just sent a letter to the Department of the Treasury of America, requesting clarification on important definitions in the GENIUS stablecoin act to differentiate decentralized stablecoins from payment stablecoins.
The company emphasizes that decentralized stablecoins, such as LUSD on Ethereum, are issued through automated smart contracts without a central entity, and therefore should be exempt from oversight to encourage innovation. A16z also proposed adopting the “decentralization based on control” framework from the Digital Asset Market Clarity Act 2025, allowing activities such as transaction validation, operating nodes, or developing non-custodial wallets to be unregulated as intermediaries.
In addition, the company calls for the modernization of AML/KYC regulations to combat illicit financing without stifling innovation, while suggesting the use of decentralized digital identity with security technologies such as zero-knowledge proofs and multi-party computation, which help verify identity securely, protect personal data, and support fraud detection.
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