a16z exec urges stablecoin regulation to prevent major risks

Chris Dixon, the founder of Andreessen Horowitz’s a16z Crypto, emphasised the urgent need for regulatory clarity around stablecoins to avoid potential risks similar to the FTX (CRYPTO:FTT) collapse. 

Speaking at the Permissionless III event in Salt Lake City, Dixon shared his concerns regarding the lack of clear regulations in the U.S. and how this is holding back innovation in the digital assets space.

Dixon acknowledged that the cryptocurrency market has made significant progress in overcoming technological barriers. 

However, he identified two major obstacles for further growth: infrastructure and policy clarity. 

According to Dixon, “One of the many unfortunate things about the current regulatory regime is, not only have they gone after the good actors, but they have also allowed scams and bad actors to flourish.”

Dixon believes that new waves of innovation in digital assets are being hindered by fear of regulatory repercussions. 

He noted that many entrepreneurs and developers are reluctant to build new applications due to concerns that they could face lengthy legal battles. 

“At least half of our investments in the last few years have been application layer,” Dixon said, but many projects are stalled due to uncertainty over regulations.

Dixon also compared the U.S. regulatory environment to Europe, which he believes is ahead in terms of consumer protection and investor safety. 

He warned that without clear guidance, the digital asset sector could face another crisis on the scale of FTX, stressing that policymakers need to prioritise eliminating bad actors while providing a clear path for legitimate players.

At press time, the FTX Token price was $2.14.