Former US Treasury Secretary and World Bank chief economist Larry Summers says cryptocurrencies will be better regulated rather than treated as a libertarian paradise.
Larry Summers sees crypto benefiting from strong regulation
Lawrence Summers, who served as Treasury Secretary in the Clinton administration and director of the National Economic Council of the White House in the Obama administration, spoke about regulating cryptocurrencies in an interview with Bloomberg on Friday. Summers, a former chief economist at the World Bank, is currently President Emeritus of Harvard University.
He was asked why regulators around the world are “deeply skeptical” about cryptocurrencies. China, for example, is taking action against crypto activities. Summers began by stating that the word “crypto” implied a “desire for secrecy in relation to large sums of money” and stated:
When large sums of money happen in secret, there is a risk of money laundering, the risk of assisting various types of criminal activity, and the risk of innocent people being ripped off.
“The truth is, if we didn’t regulate flight safety, we wouldn’t have a viable aircraft industry,” he continued. “We wouldn’t have the transportation system we would have if we didn’t regulate car safety.”
He added that the blockchain-based payments industry “will be more solidly regulated rather than trying to be some kind of libertarian paradise,” noting:
I think the crypto community needs to recognize this and cooperate with governments, and when they do. I think this innovation can be one of the most important innovations of this time.
The former chief economist at the IMF pointed out that some people believe in the idea that cryptocurrency will be “some kind of libertarian paradise where we won’t be able to enforce banking rules like knowing your customers”. [KYC]where we can move money freely and avoid taxes. “
Summers said, “I think it’s a realization that all industries need to arrive with systemic importance,” added:
It’s not entirely dissimilar to the discussion about big tech companies. You need a regulatory framework. Not only do they need it to protect their consumers, they need it for their own protection.
In conclusion, he said: “Without a strong SEC, we would not have the New York Stock Exchange as the center of the world stock market,” he emphasized: Die Zeit. “
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