U.S. Treasury’s GENIUS Act Sets Stage for Privacy-First Crypto Regulation, Says a16z

The U.S. Treasury's implementation of the GENIUS Act marks a pivotal moment for stablecoin and cryptocurrency regulation. Michele Korver, Head of Regulatory at a16z Crypto, advocates for privacy-preserving innovation, highlighting the potential of decentralized digital identity (DID) and zero-knowledge proofs (ZKPs) to transform compliance.

Korver's submission to the Treasury underscores how these technologies can enhance national security while safeguarding civil liberties. She critiques current AML/KYC frameworks as outdated, urging FinCEN to leverage its authority to modernize rules. This would enable crypto firms and traditional financial institutions to adopt blockchain-based identity tools, shifting verification from centralized databases to digital wallets.

Privacy-preserving cryptography, including ZKPs and multi-party computation (MPC), offers a path to verify users without exposing sensitive data. This approach balances individual control over personal information with regulators' need for transparency to combat illicit activity.