Cryptocurrency will be better regulated” – regulation

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 White House National Economic Council in the Obama administration, spoke about cryptocurrency regulation 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 was, for example take tough action on crypto activities. Summers began by noting that the word “crypto” suggests a “desire for secrecy surrounding large financial sums,” and continued:

When large sums of money happen in secret, there is a risk of money laundering, a risk of supporting various types of criminal activities, and a risk of innocent people being ripped off.

“The truth is that if we didn’t regulate aviation safety, we wouldn’t have a viable aircraft industry,” he continued. “We wouldn’t have the transportation system we have if we didn’t regulate auto safety.”

He added that the blockchain-based payments industry “will be better regulated in a solid way, 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 so. I think this innovation can be one of the most important innovations of this time.

The former IMF chief economist noted 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 recognition that all industries need to be addressed with systemic importance," adding:

It's not entirely dissimilar to the discussion surrounding big tech companies. You need a regulatory framework. Not only do they need it to protect their consumers, they need it to protect themselves.

He concluded: "If we didn't have a strong SEC, we wouldn't have the New York Stock Exchange as the center of the world stock market," emphasizing, "Even if people don't like the rules at the time."

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