Former U.S. Treasury chief sees „Friction“ in payments as the best argument for using cryptomoney

In a June 25 interview with Jeremy Allaire of the Circle, former Treasury Secretary Lawrence H. Summers spoke about the ability of cryptomonies to repair the modern financial system, particularly noting the great difficulty in processing global payments.

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Moderation in all things?
Describing himself as one of „Bitcoin’s evangelists and highly traditionalist,“ Summers was very cautious about aligning himself with the more extreme use cases for cryptomonies.

Specifically, Summers rejected all of the common arguments for cryptomonies, about the monetary collapse caused by quantitative easing, as well as the need to keep transactions private. „I don’t think existing currencies are on the way to being debated,“ he said of the former, while he seemed resigned to the latter: „Governments will always want less financial privacy over time, and they will succeed in getting what they want.

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However, Summers noted that examples such as trying to send money to her son while he was studying abroad or the $3 fee at the ATMs are the clearest obstacles to a comprehensive system:

„I think the case for all this innovation will lie in the fact that there is a ridiculous degree of friction in today’s world around doing pretty complex things. …] This friction comes not only from the greed of the intermediaries, although there is greed among the people in between, it comes from the various difficulties and challenges associated with mutual trust.

The United States Department of the Treasury and the cryptosystems

Currently a professor at Harvard, Summers was President Clinton’s Secretary of the Treasury.

Despite the recent revelation in John Bolton’s book that President Trump told current Treasury Secretary Steve Mnuchin to „go after Bitcoin,“ the Department’s relationship with cryptomonies is complicated.

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The Office of the Comptroller of the Currency is a wing of the Treasury, responsible for the regulation of banks. The office recently welcomed the new administration that has come to lead Coinbase’s legal team.