US Losing Edge In Crypto Industry Due To Regulatory Issues, a16z Report Shows

As regulatory scrutiny of digital asset firms continues to escalate in the U.S., there has been a decline in America’s leadership position in the crypto industry, according to a new report released by venture capital firm Andreessen Horowitz, also known as ‘a16z.'

What Happened:  The report ‘State of Crypto' cited a steady stream of enforcement actions and court cases that have been linked to this decline.

Several metrics measuring crypto-related activity in the U.S. have declined in recent years, including the number of crypto developers in the country, which fell below 30% last year from nearly 40% in 2018.

Furthermore, the report said there has been a continuous decline in the portion of traffic to crypto-related websites from U.S. users, dropping from around 23% in 2019 to just over 15% last year.

See More: Top Indian Apps That Give Bitcoin, NFT Rewards

Why It Matters: While the report noted that these declines could be influenced by other factors such as a decline in digital asset prices, it also highlighted the role of regulatory pressures, with several enforcement actions and legal cases filed by regulators like the Securities and Exchange Commission and the Commodity Futures Trading Commission in recent months.

The report called for new rules and guidance from government agencies to dispel regulatory uncertainty and promote innovation in the U.S. crypto industry.

Legislation such as the Responsible Financial Innovation Act and the Digital Commodities Exchange Act were also noted as providing much-needed clarity for the industry.

Coinbase, a popular cryptocurrency exchange that allows trading of Bitcoin BTC/USD and Ethereum ETH/USD, warned last month that one million tech jobs are at risk of being outsourced due to regulatory uncertainty in America.

Read More: Bitcoin Holds $30K, Ethereum Drops Before Shapella Upgrade, Dogecoin Down: Analyst Predicts Drop For Top Crypto