Former US Treasury chief considers “payment friction” to be the best argument for using cryptocurrencies

In an interview with Circle’s Jeremy Allaire on June 25, former Treasury Secretary Lawrence H. Summers spoke about the ability of cryptocurrencies to repair the modern financial system, noting the major difficulties that exist at the time of global payment processing.

Moderation in all things?

Describe yourself as someone between “Bitcoin evangelists and highly traditional” Summers was very careful in adapting to the most extreme cryptocurrency use cases.

Specially, Summers rejected all of the common arguments about cryptocurrencies, such as the currency collapse caused by quantitative easing and the need to keep transactions private. “I don’t think existing currencies are on the way to debate,” he said of the first, while he seemed resigned to the last point: “Governments will want less and less financial privacy over time and they will succeed to get what they want. ” .

Former US Treasury chief considers “payment friction” to be the best argument for using cryptocurrencies
Former US Treasury chief considers “payment friction” to be the best argument for using cryptocurrencies

Summers found, however, that examples like Trying to send money to your child while studying abroad or $ 3 commission from ATMs are the clearest obstacles to a global system:

“I think the reason for all of these innovations will be the fact that there is a ridiculous amount of friction in today’s world when you do pretty complex things. […] This friction comes not only from the greed of the mediators, although there is greed among the mediators, but also from the various difficulties and challenges associated with mutual trust. “

The U.S. Treasury and Cryptocurrencies

Summers was currently a professor at Harvard University and Secretary of Finance for President Clinton.

Despite the recent revelation in John Bolton’s book that President Trump told current Treasury Secretary Steve Mnuchin to “pursue Bitcoin,” the ministry’s relationship with cryptocurrencies is complicated.

The office of currency auditor is a wing of the Ministry of Finance, which is responsible for regulating banks. The office recently welcomed the new administration, led by the Coinbase legal team.

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