Venture capital firm Andreessen Horowitz will be sending several executives to Washington, DC this week to explain to executives on Capitol Hill and the White House why they should regulate the next generation of the Internet.
The company, commonly known as a16z, is a major investor in crypto and other technologies based on decentralized models that make up what is known as web3. Anthony Albanese, chief operating officer of a16z Crypto, and Katie Haun, general partner and former federal prosecutor, will be among the executives traveling to meet with government officials this week, the company announced exclusively to CNBC.
Although it was not announced which officials the executives will meet with, the a16z Crypto team said that “top White House executives, law enforcement agencies, regulators, House and Senate” would be attending these meetings.
Andreessen Horowitz is a traditional VC company in Silicon Valley that has invested in successful technology companies such as Airbnb, Facebook, Lyft and Slack. The company has announced three funds for crypto and Web3 totaling $ 3.1 billion, although it has not disclosed how much has been invested to date.
The team will promote Andreessen Horowitz’s vision for successful regulation of the next generation of the web. It set that agenda in a report released Wednesday, defining web3 as “a group of technologies that includes blockchain, cryptographic protocols, digital assets, decentralized finance and social platforms”.
Although politics are still grappling with the issues of Web 2.0, which is largely characterized by the rise of social networks, a16z believes that looking to the future can help solve these problems while preparing for future challenges.
“Web3 represents the alternative to a digital status quo that is frankly broken,” said Tomicah Tillemann, global head of politics at a16z, in an interview with CNBC on Tuesday. “Web3 is the alternative, it’s the solution we’ve been waiting for. It is the answer to the challenges posed by Web2 having this right. “
Tillemann, who told CNBC that he owns cryptocurrencies, mostly in Bitcoin and Ethereum, pointed to current issues like industry consolidation and data breaches that blockchain proponents say can be helped by the decentralized nature of the new technology.
In the agenda published on Wednesday, a16z suggests that these new technologies can provide more secure digital infrastructure and improve economic opportunities. The report urges policymakers to develop a national strategy for these technologies, establish appropriate regulations based on the risk of different types of products, and consider collaboration between authorities to regulate beyond the Securities and Exchange Commission.
Tillemann said it might one day make sense for a new agency to rule this emerging tech class.
“In the short term, there are agencies like the Consumer Financial Protection Bureau that are well placed to address some of the fraud and consumer protection concerns raised by policy makers in this area,” he said. “In the longer term, there are probably very good arguments for creating a regulatory architecture that is fit for the 21st century.”
Yet change in Washington is often slow. Federal lawmakers have tried (and failed) for years to pass basic digital privacy laws while lagging behind Europe and many US states. And several progressive groups say digital actors like Amazon, Apple, Facebook and Google have amassed too much power because courts and regulators relied on outdated interpretations of the law. However, these companies say they face stiff competition.
The first step, however, is to make politicians aware of the challenges ahead, said Tillemann.
“There are probably few areas more critical to a country’s long-term success in the 21st century than the quality of its digital infrastructure,” he said. “And in the United States, not only are we losing this race, it’s unclear that many of our policymakers even realize that there is a competition going on.”
However, this summer’s debate about mandatory tax reporting for the cryptocurrency industry in the infrastructure package has helped draw legislators’ attention to the technology. Concerned voters flooded lawmakers’ phone lines, urging them to correct what they believed to be problematic wording in the bill that would place undue burdens on the industry.
But Tillemann said that Web3 regulation is about a lot more than cryptocurrencies. It also includes discussions on non-fungible tokens (NFTs), internet connectivity, and data storage.
“We should also recognize that this goes much further than just digital assets,” said Tillemann. “This is about the future of the internet.”
– CNBC’s Ylan Mui contributed to this report.
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