A16z Crypto Seeks Treasury Clarification on LUSD and Decentralized Stablecoins Under the GENIUS Act

A16z Crypto has formally petitioned U.S. Treasury officials to sharpen the definitions in the proposed stablecoin framework, arguing that decentralized digital assets deserve a regulatory carve‑out to sustain innovation and competition in the sector.

In a letter dated November 4 to Treasury Secretary Scott Bessent, the firm responds to the public rulemaking for the GENIUS Stablecoin Act, praising it as a major milestone while seeking explicit clarity on whether decentralized stablecoins fall outside the Act’s reach.

The submission uses LUSD backed by Ethereum as a practical example, arguing that decentralized stablecoins are issued through autonomous smart contracts and are not controlled by a central issuer.

It further urges the Treasury to state plainly that these decentralized assets are not issued by an individual under the Act, and therefore should be exempt from the restrictive posture of Section 3(a), which currently limits U.S. payment stablecoin issuance to approved issuers.

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