Between fever-pitch anticipation over the impending approval of a Bitcoin exchange-traded fund, the Commodity Futures Trading Commission’s $42-million-plus settlement with Tether and Bitfinex, and Vladimir Putin brooding over cryptocurrency’s capacity to transfer value, this past week has been saturated with major policy news. While all the above are instances of state figures’ and institutions’ top-down actions and statements on digital assets, an arguably even more interesting tide has emerged on the side of the crypto industry itself.

Two major players of the digital space, Coinbase and a16z (Andreessen Horowitz), came forward with proposed visions for regulating internet-native economic activity

Below is the concise version of the latest “Law Decoded” newsletter. For the full breakdown of policy developments over the last week, register for the full newsletter below.

Regulatory push from the bottom up

The broad proposal put forth by a16z presents a vision of Web 3.0 as an array of technologies to organize human activities that are fundamentally decentralized. Its policy agenda emphasizes the need for regulators to ensure an environment where the digital infrastructure supporting Web 3.0 could flourish and where risks are addressed in a targeted fashion. 

Coinbase’s framework is more narrowly focused on the realm of digital finance. Consistent with a16z’s vision, it argues in favor of designating a separate agency (presumably not the Securities and Exchange Commission) to oversee the activities of what the framers call “marketplaces for digital assets,” or MDAs.

ETF excitement

A huge part of the crypto crowd seemed on the verge of breaking into tears of joy over multiple signals suggesting that the SEC would not get in the way of a Bitcoin (BTC) ETF. SEC Chair Gary Gensler has previously spoken favorably of the level of investor protection granted by Bitcoin ETFs that are based on BTC futures rather than the “physical” asset.

Gensler’s sentiment provided a background against which subtle cues like Nasdaq’s certification of Valkyrie’s Bitcoin Strategy ETF and a suspiciously well-timed “SEC Investor Ed” tweet made the approval look all but done 

CBDCs never sleep

Another week, another crop of reports of central bank digital currency advancement from nearly every time zone. In the United Kingdom, an independent nonprofit called the Digital Pound Foundation will support the nation’s CBDC effort with expert insight. Over in Japan, a central bank official emphasized the need for the simplicity of the prospective digital yen’s design that would ensure interoperability with commercial payment systems. Finally, the financial brass of the G7 discussed foundational policies around digital national currencies, suggesting that there is enough cross-border coordination to make the major sovereign CBDCs of the future fully interoperable.