Venture capital firm Andreessen Horowitz (a16z crypto) a venture capital firm, has urged the U.S. Treasury Department to ensure consistent stablecoin regulations across federal and state jurisdictions as policymakers move forward with implementing the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act.
In a detailed response to Treasury’s Notice of Proposed Rulemaking (NPRM), a16z argued that state regulatory frameworks should closely mirror federal requirements to preserve stablecoin fungibility and avoid creating a fragmented payments landscape.
Led by a16z crypto General Counsel and Head of Policy Miles Jennings, the venture firm argued that state-level regulatory systems must seamlessly mirror federal requirements. The alternative, they warn, is a fractured patchwork of regional rules that could cripple token fungibility and slow down domestic payment innovation.
Stablecoins need uniform rules to function
According to a16z, stablecoins can only serve as an effective payment mechanism if they remain interchangeable regardless of where they are issued.
“Stablecoins only work for payments if they’re fungible,” Jennings said in a post on X. “A stablecoin issued in one state must carry the same value as one issued federally or anywhere else.”
The firm warned that allowing states to impose materially different requirements for reserves, redemption rights, capital standards, liquidity management, or risk controls could undermine this principle and recreate the regulatory patchwork that has historically burdened payment networks in the United States.
The filing argues that all key GENIUS Act requirements should remain uniform across jurisdictions to preserve stablecoin interoperability and provide a clear pathway for companies transitioning from state-level oversight to federal regulation.
Protecting DeFi and decentralized stablecoins
A major focus of a16z’s comments involves preserving statutory definitions included in the GENIUS Act.
The firm argued that states should not have the authority to independently reinterpret terms such as “payment stablecoin” or “digital asset service provider,” noting that Congress intentionally created these definitions to establish clear regulatory boundaries.
According to the filing, consistent definitions are particularly important for protecting decentralized stablecoins and decentralized finance (DeFi) protocols that Congress deliberately excluded from certain regulatory requirements.
“States shouldn’t get to reinterpret terms like ‘payment stablecoin’ or ‘digital asset service provider,'” Jennings said. “Uniform definitions preserve GENIUS’ important protections for decentralized stablecoins and DeFi innovation.”
a16z further argued that allowing states to expand or narrow these definitions could create regulatory uncertainty for developers, validators, non-custodial software providers, and other participants in decentralized blockchain ecosystems.
Calls for nationwide passporting framework
The venture capital firm also urged the Treasury to establish clear passporting standards that would prevent states from imposing additional licensing or operational requirements on stablecoin issuers already approved in another certified state.
Under a16z’s proposed approach, a stablecoin issuer licensed in one state with a Treasury-approved regulatory framework should be able to operate across state lines without obtaining separate approvals from each jurisdiction.
“A host state shouldn’t be able to impose its own requirements on an issuer already licensed elsewhere,” Jennings stated. “Certified state regimes should passport across state lines—that’s what a level playing field looks like, and that’s how we get more innovation in internet-native money.”
The firm believes such an approach would reduce compliance burdens while helping stablecoin businesses scale nationally.
Stablecoins becoming core financial infrastructure
In its filing, a16z emphasized the growing role of stablecoins in global payments and settlement systems.
Citing industry growth, Jennings referenced comments from a16z co-founder Chris Dixon, who previously described stablecoins as money’s “WhatsApp moment.”
“More than $12 trillion moved through stablecoins last year, and volumes will keep climbing as builders improve the global finance stack,” Jennings said.
The firm concluded that Treasury’s implementation of the GENIUS Act represents a critical opportunity to establish a durable national framework for stablecoins while supporting innovation and maintaining financial stability.
“The GENIUS Act demonstrates what’s possible when effective policy and technology work together,” Jennings added. “Now let’s get the implementation right.”
Also read: UK Lawmakers Push BOE to Ease Stablecoin Rules Amid Growth Concerns
