Bitcoin.com recently dropped a story about Western Union investing in Barry Silbert’s Digital Currency Group. Additionally, one of the new advisors announced to DCG was Lawrence H. Summers who’s widely known for being the 71st Secretary of the Treasury for President Clinton. Summers who also worked with the Obama administration has some interesting theories concerning economics. Last February Summers wrote an op-ed for the Washington Post called “It’s time to kill the $100 bill.”
Summers Against Big Bills
Lawrence H. Summers, an American economist who is currently a University Professor at Harvard University, has become an advisor for the Digital Currency Group (DCG). The new DCG advisor is well known for his role in high-ranking government positions. In the 90s, Summers became Secretary of the Treasury and worked with the Clinton administration until the end of the president’s term. Summers also engaged with many leaders at times of global economic crisis. This included the 1994 financial crisis in Mexico, 1997’s Asian economic problems, and also during Russia’s hardships. His role in the global economy and his position with the Treasury shows Summers is a fan of central planning; quite the opposite of the core foundations of decentralization the cryptocurrency Bitcoin was based upon.
In a February opinion piece for the Washington Post, Summers wrote about a paper he had read by a colleague from Harvard. The former Secretary of the Treasury said the paper called “The Case for Eliminating High Denomination Notes” and made a “compelling case for stopping the issuance of high denomination notes.”
Just as many politicians before him, Summers presents the position ofprotectionism to bolster the opinion of getting rid of large denominations. He cites issues with the refugee crisis, economic weaknesses in certain countries and the “rise of populist movements” as the motives. Summers details at the end of his editorial what he thinks is a solid idea saying:
Even better than unilateral measures in Europe would be a global agreement to stop issuing notes worth more than say $50 or $100. Such an agreement would be as significant as anything else the G7 or G20 has done in years. China, which is hosting the next G-20 in September, has made attacking corruption a central part of its economic and political strategy. More generally, at a time when such a demonstration is very much needed, a global agreement to stop issuing high denomination notes would also show that the global financial groupings can stand up against ‘big money’ and for the interests of ordinary citizens.
So Why is Summers Keen on Bitcoin?
It is interesting that a person such as Summers is advising a firm that deals with cryptocurrencies such as Bitcoin and blockchain technology. CEO of Bitcoin.com, Roger Ver, thinks the DCG advisor choice is something the crypto-community should think about. Ver asked the community in a forum post:
How can we remain true to the principles of individual monetary sovereignty that motivated most of us to get involved with Bitcoin in the first place? I suspect having a central planning Keynesian like Larry Summers investing in our space is a turning point for Bitcoin.
The turning point for the community seems to be happening. One can see this landscape change as the same large corporations, and banks who once laughed at Bitcoin are now looking to co-opt the technology that underpins it. Even Western Union’s investment in DCG could be called an ironic twist. Summers joining the community is even more strange as most of his advice relies on central planning that probably wouldn’t mix well with an industry focused on decentralization and disruption.
Images courtesy of DCG website, Shutterstock, and Wiki Commons