Former Obama Advisor Larry Summers to Critics: Don't 'Write Off' Bitcoin

NEWS
Pete Rizzo
Apr 30, 2014 at 23:15 UTC  |  Updated  Jun 27, 2014 at 14:49 UTC

Former Secretary of the US Treasury, World Bank chief economist and Obama administration economic advisor Larry Summers has weighed in on the subject of digital currency in a new interview with The Wall Street Journal.

Though Summers didn't take a definitive stance on bitcoin, he did caution critics not to dismiss new and potentially disruptive technologies.

The former Harvard University president told the journal:

"I'm not ready to stand with those who are sure they have seen the future here, but it seems to me that it's a serious mistake to write this off as either ill-conceived or illegitimate."

Summers compared critics of digital currency to those who rejected such innovations as digital photography, plastic tennis rackets and the Internet during their early days, adding:

"It seems to me that the people who confidently reject all the innovation here [in new payment and monetary systems] are on the wrong side of history."

Issues with current financial system

Though he did not address bitcoin directly in most of his talks, Summers did cite how the potential of digital currency or a similar technology could solve problems with the current financial system's payments infrastructure.

For example, he suggested that technologies that provide quick, low-cost transactions could be beneficial to "a child within the United States or across international borders" and to immigrants that want to remit money to other nations.

Further, he cited the "enormous investment" the current financial system requires to mitigate fraud, and discussed the enduring appeal of safe stores of value.

Payments will change

Despite the fact that he wasn't bullish about the prospects of bitcoin, Summers was able to confidently state that he believes the payments industry will change to meet the needs to consumers:

"I am much more confident that the world of payments will look very different 20 years from now than I am about how it will look."

About Summers

Born in Connecticut as the son of two economists, Summers' first prominent government position was on the Council of Economic Advisers during the Ronald Reagan administration.

In the 1990s, he served at Harvard University and World Bank before joining the Clinton administration where he eventually rose to serve as Secretary of the Treasury, though his involvement with those institutions was not without controversy.

More recently, Summers was a frontrunner to replace outgoing Federal Reserve chair Ben Bernanke before withdrawing in September of last year.

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