A16z crypto is urging the UK to consider a "more nuanced approach" to the regulation of digital assets as the country considers a new framework to govern both trading and lending.

"A 'one-size-fits-all' approach to the regulation of cryptoasset transactions would not be consistent with the Treasury’s core design principle of 'same risk, same regulatory outcome,'" the venture capital fund said in a letter to the UK Treasury. It was responding to a consultation paper first published by the UK government in February. 

Both policymakers and regulators need to develop a "more uniform" understanding of how decentralization works in web3 systems, a16z crypto said.

The venture firm argued that regulatory frameworks should include a "principles-based analysis" that considers whether or not the very structure of a given platform or protocol has already mitigated possible risks. More specifically, a16z crypto said that regulations should not unnecessarily hinder a project from decentralizing.

(by Nathan Crooks)