Larry Summers, the former Secretary of Treasury of the Clinton administration, is impressed by blockchain technology and believes that it will change financial practice and exchange as we know it today.
Dr Larry Summers is no stranger to the world of finance. He was the Secretary of Treasury of the Clinton administration.
He has also served as the President of Harvard University and Chief Economist of the World Bank. When he makes a statement on matters concerning the financial sector, the world notices.
Speaking at Consensus 2016 in New York, Larry Summers says: “Is the blockchain technology going to be fundamental? I think the answer is overwhelmingly likely to be yes. Is bitcoin going to be a valuable store of value, the same way as people use gold? I don’t know, but I think that certainly the answer is ‘no’ doesn’t seem like the right position to take.” Intermediaries – the source of friction
What is the friction that Larry Summers is displeased with? It is the role that banks and other intermediaries play in the transfer of money. A simple transaction made with a credit card by a customer at a retail store could attract transaction fees of up to 2%. Bitcoin can reduce transaction fees to negligible amounts because it is decentralized and it removes the role of the intermediary.
Speaking at the Museum of American Finance on Wall Street, Larry Summers says: “If the day ever comes where Bitcoin counts for an appreciable fraction of commerce which takes place in the world economy, on that day it will be because that commerce is regulated and subject to safeguards and people believe that something other than a mathematical algorithm is ensuring that their money will not be stolen.” Differing Views from the Financial Sector While Larry Summers is bullish about the […]
