U.S.’s Influence May Ascend Due to Actions Against Crypto: Report

• Andreessen Horowitz’s a16z released a report about the current state of crypto in the U.S. 
• The report suggests that action against the crypto industry might damage U.S. influence. 

A recent report from a16z hints that with recent attacks on crypto, the U.S. might lose its edge on the global stage. Released on April 11, the report links the recent enforcement actions and court cases against crypto entities and argues that they might diminish America’s leadership in digital assets. 

The Report by a16z and Current U.S. Crypto Scenario

The recent report by Andreessen Horowitz’s a16z highlights some parameters that were declined due to crypto activities in the U.S. 

• For instance, in 2018, around 40% of developers were in the States, 
• This figure dropped in 2022 to 30%. 
• The crypto-related websites saw a considerable decline in their U.S. user base for the third year. 
• In 2019 the user traffic was around 23%, while in 2022, it went down to 15%. 

This declining user traffic can be linked to increasing Web3 influence. The report then suggests pointers for the regulators to act upon. 

Recent activities show that banning new technologies and business models seriously hampers American values, making the land of the free a hostile environment. 

All these instances infer or indicate that the U.S. regulators like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) are trying to tighten their grip on the crypto industry. 

Coinbase received Wells Notice from SEC regarding their staking product; however, this does not mean they are being sued. Coinbase needs to satisfy the agency with proper answers to get out of this. Kraken received a fine of around $30 Million, which made them close their staking program. 

The infamous SEC vs.Ripple case has been going on since December 2020; SEC argues that their token XRP is, in fact, security and be treated as such. In contrast, Ripple fights against the claim. If the financial watchdog wins the case and XRP is rebranded as a security, then every other token might come under the same purview. This would require issuers to register themselves with the SEC, thereby bringing them inadvertently under their watch. 

The report also suggests some required changes to help soothe the situation and help government agencies take a better stand. The U.S. Financial Services Subcommittee was created in 2023 for the same reasons. Legislations are required to clear the air and help crypto companies work better in America. 

For instance, the Responsible Financial Innovation Act, the Digital Commodities Exchange Act, and the Digital Commodities Consumer Protection Act are a few of the required regulations. All these combined paints a picture regarding crypto legislation, but they need to be clearer and more precise. 

The Future of Crypto in the United States

There are multiple cases against various crypto entities currently operating in U.S. courts. The supposed outcome of these cases can reshape crypto’s future in the country, along with establishing a regulatory landscape. The SEC and the CFTC are fighting various lawsuits against crypto entities like FTX, Celsius, and Voyager. 

The U.S. Presidential Candidate, Robert F. Kennedy Jr., openly supported Bitcoin as a haven amid economic uncertainties and spoke about the ill effects of the proposed Federal CBDC, FedNow. The crypto industry seems excited to have a Presidential candidate talk about the positives of Bitcoin and is hoping for his win. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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