Clear regulations, such as the CLARITY Act and the positive reception to the GENIUS initiative, are viewed as essential for restoring public trust.
a16z’s general partner, Chris Dixon, explained on X that the cryptocurrency industry should not be criticized for focusing on the financial industry because money and capital are basic forms of coordination.
Dixon shared his view that the industry’s current focus on financial products is necessary for the total adoption of digital assets.
In a recent detailed statement, Chris Dixon, a general partner at a16z crypto explained that we are currently in the “financial era” of blockchains to counter critiques that “non-financial use cases” for cryptocurrencies are “dead” and that the “read-write-own” vision of the internet has failed.
Dixon argued in his post on X that blockchains introduce a new way to coordinate people, capital, and even AI agents at a global scale. He explained that money and capital are the most basic forms of coordination, so finance is the most natural place for the technology to start.
Dixon pointed out that technology usually follows a specific “order of operations.” For example, in the 1960s and 70s, the internet was focused on basic technical foundations like packet switching and TCP/IP. It took decades of building this “plumbing” before the world saw the rise of social media, video streaming, or global online communities.
In the case of the blockchain industry, before we see massive adoption in categories like gaming, social media, or decentralized AI, we need a stable layer of “on-ramps.” This includes things like reliable digital wallets, identity systems, and high liquidity.
Financial applications such as stablecoins, payments, and decentralized finance (DeFi) are the tools that bring people into the ecosystem. Once hundreds of millions of people are “on-chain” for financial reasons, getting users for other types of apps becomes easier.
Recent market data shows that stablecoins have become one of the most successful products in the industry. For example, PayPal’s stablecoin (PYUSD) and Circle’s USDC have seen significant growth in transaction volume.
a16z has focused on the “long game,” due to years of “rug pulls,” extractive scams, and aggressive regulatory battles that have made many people cynical about tokens. Dixon believes it is very difficult to build a community of owners when the environment is filled with fear and uncertainty.
According to Dixon, the lack of clear government policy has been a massive development hurdle for the last five years, as legitimate builders were often afraid to innovate, and bad actors would take advantage of the confusion.
However, the positive reaction to the GENIUS Act and the passing of the CLARITY Act have made stablecoins be viewed as a legitimate and important part of financial technology.
Under Trump’s administration, there has been an increased focus on a “Strategic Bitcoin Reserve” and a move toward more crypto-friendly leadership at the SEC. This change in policy is expected to provide the “risk-based guardrails” that Dixon says are necessary to protect consumers and encourage institutional investment.
Dixon pointed out that the first paper on neural networks, the basis for today’s AI, was published in 1943. Similarly, the commercial internet only became possible because of policy actions in the 1990s.
The blockchain industry is currently in its “messy years,” but difficult periods of groundwork and policy-making will eventually lead to its “obvious years” of mainstream success.
