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The percentage of crypto developers in the United States has dropped by approximately 10 percent since 2018 according to the a16z State of the crypto report.
In this year’s State of Crypto report by Andreessen Horowitz (a16z), the researchers concluded that software developers are entering the Web3 industry at a record pace. Nevertheless, the report noted that recent setbacks do not necessarily mean the failure of developers but the opaque nature of centralized systems. Moreover, Bitcoin and Ethereum networks were not affected by the failures of FTX and Alameda Research.
2023 State of Crypto Report by a16z
However, a16z noted that the ongoing crypto regulatory scrutiny in the United States is hurting Web3 development in the nation. Furthermore, several crypto projects have closed their business operations in the United States and opened them in friendlier global markets. In this regard, Andreessen Horowitz is convinced the United States is losing crucial jobs to other global markets amid rising global inflation.
“Banning new business models or technologies undermines American values and drives innovation and jobs elsewhere,” the report by a16z noted.
Notably, the United States financial regulators have embarked on using the judicial system as a form of a crypto crackdown. Already, top centralized crypto exchanges including Binance, Coinbase Global Inc (NASDAQ: COIN), and Kraken have been affected by the recent regulatory scrutiny.
“Crypto faces a shifting regulatory environment. Policymakers are proposing bipartisan bills. Courts are deliberating over significant cases. Agencies are issuing enforcement actions. These are precedent-setting times,” a16z added.
Interestingly, the percentage of crypto developers in the United States has dropped by approximately 10 percent since 2018 according to the a16z State of the Crypto Report. Additionally, top crypto websites have recorded a significant decline in the percentage of traffic in the past five years.
Way Forward for Crypto in the United States
According to Andreessen Horowitz, financial regulatory agencies in the United States should offer regulatory guidance or new legislation that establishes clear rules to protect consumers and in turn, help the Web3 industry flourish. The report highlighted that crypto businesses should be the sole focus of regulations in the United States instead of eyeing decentralized and autonomous software development.
Already, the United States treasury department has been used to ban decentralized open-source software including Tornado Cash. According to Coinbase Global, United States law enforcement should arrest bad actors instead of banning nascent technologies.
“America is at a once-in-a- generation inflection point: we have the opportunity to be the leader in the digital currency space and reap the benefits this leadership enshrines, or we can concede our leadership role to geopolitical adversaries who are eager to take the mantle as the 21st century’s global heavyweight,” Coinbase founder and CEO Brian Armstrong noted.
Moreover, Ripple Labs, which is facing a lawsuit over XRP sales, has threatened to leave the United States market if the SEC wins the case.