Former U.S. Treasury secretary Larry Summers says there’s one key thing that the crypto industry needs in order to thrive.
In a new interview with Bloomberg, Summers says that nefarious financial activity is inherent in the crypto space, and like other industries, digital assets will require regulation to become safe and reliable.
“Let’s start from the word crypto. It suggests a desire for secrecy with respect to large financial sums, and we have large financial sums happening in secret. You have risks of money laundering, risks of supporting various kinds of criminal activities, risks of innocent people being ripped off.”
Summers likens the conversation around regulation in crypto to similar discussions in industries like the big tech and the stock market.
“It’s not entirely unlike the discussions of the big tech companies. They need to have a regulatory framework. They don’t just need it for the protection of their consumers. They need it for the protection of themselves.
We wouldn’t have the New York Stock Exchange as the center of the world’s stock markets if we didn’t have a strong SEC and that’s a competitive asset ultimately even if people don’t like some of the rules some of the time. I think that’s the recognition the crypto community is going to need to come to.”
The economist says that certain aspects of the crypto industry can spark huge waves of innovation, but that the community needs to cooperate with governments to make it happen.
“Ultimately for blockchain-based payments, that industry is going to do better regulated in a sound way rather than trying to be some kind of libertarian paradise, and I think the crypto community needs to recognize that and needs to work cooperatively with governments. If they do that, I think that this innovation can be one of the important innovations of this period.”
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