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Crypto enthusiasts would do well to embrace government regulation of the industry, according to former U.S. Treasury Secretary Lawrence Summers.
Given the large financial sums involved in crypto, it’s unrealistic for the industry to expect to operate in secrecy without government oversight, Summers said in an interview on Bloomberg TV. He made a comparison to the airline and automobile sectors, which wouldn’t be viable without being regulated.
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“When you have large financial sums in secret, you have risks of money laundering, risks of supporting criminal activity, risk of innocent people being ripped off,” he said.
Summers was making the comments after China banned all crypto transactions and vowed to stop illegal crypto mining, delivering the toughest blow yet to the trillion-dollar industry. The country — which has long expressed displeasure with crypto because of its ties to fraud and money laundering, and excessive energy usage — said that digital tokens including Bitcoin and Tether are not fiat currency and cannot be circulated.
The crypto industry should shed the idea that it’ll function as a “libertarian paradise” where government rules can’t be imposed, Summers said, adding that all sectors that are systemic in their importance need to recognize that. “Not just for the protection of consumers but protection of themselves,” he said.
— With assistance by David Westin
