Former US Secretary of the Treasury under President Bill Clinton and past President Emeritus of Harvard University Lawrence Summers has indicated that he believes bitcoin to be a “very, very important development”.
As treasury secretary, Summers is said to have played an integral role in the US handling of several world financial crises, and his prior positions include serving as chief economist at World Bank from 1991 to 1993.
The remarks came after Summers’ speech at the National Association for Business Economics policy conference on 24 February, in which he addressed a wide range of financing topics from the US Federal Reserve’s quantitative easing strategy to virtual currencies such as bitcoin.
Reports indicate that there, Summers stated that he sees bitcoin as part of a broader transition in which information technology is affecting more aspects of American life.
Speaking of the pain points inherent in the current financial system, Summers said:
“It seems bizarre that at this late date, one has to pay as much as one does to use a debit card or to get cash from an ATM or to transfer money to one’s child living abroad.”
The former secretary went on to call bitcoin “an innovative approach” to reducing financial friction, and suggested that it would be only part of a larger concerted effort by the industry to attack these longstanding consumers difficulties.
‘An enormous deal’
Summers also notably compared bitcoin to other innovations that have emerged from California’s famed Silicon Valley, ones that were first written off only to turn out to be “an enormous deal”. Further, he reminded economists that they don’t necessarily have a track record for correctly predicting the outcome of technological advancements.
Said Summers:
“Very serious economists thought that the Internet was going to be no more important than the fax machine, so I’m not willing to dismiss Bitcoin.”
Rare optimism
The news is a rare bright spot in the day’s developments, as following the abrupt shutdown of services at Mt. Gox media outlets and pundits around the globe have begun to criticize bitcoin for its alleged shortcomings as a payments technology.
Supposed financial experts seem to be coming out of the woodwork to capitalize on the news.
For example, Dennis Gartman of the Gartman Letter took to CNBC to decry bitcoin as “nothing more than a scam of the first order”, though an increasing amount of industry experts are leaping to the digital currency’s defense.
Image credit: Treasury department via Shutterstock