- Lawrence Summers believes that the digital asset industry will benefit from reasonable regulation
- The former director of the National Economic Council also predicts that the United States will enter a recession soon
- The recession will not be as severe as the Covid-19 employment shock of 2020
Lawrence Summers, a former U.S. Treasury Secretary, thinks that regulations could help the digital asset industry grow.
Summers told the audience at Circle’s Converge22 conference in San Francisco, Regulation often is resisted by industry, but it often eventually becomes a substantial enabler for the industry. He also said that crypto companies that want less regulation in the United States should be careful about what they want.
However, Summers, who has advised fintech companies like Digital Currency Group (DCG), stated that he hoped regulators would not confiscate digital assets. He stated that they are better off recognizing an ecology that is more variable and is regulated in various ways.
Crypto firms seeking lighter regulation in the U.S. should be careful
According to the former Treasury secretary, U.S. legislators and regulators are currently attempting to enact regulations that will ensure that stablecoins are properly backed. However, he stated that does not necessitate that stablecoin issuers be banks.
In 2021, Circle, the crypto company behind the stablecoin USDC, stated that it would devise a strategy to become a full-reserve national commercial bank.
In terms of the overall economy, Summers is of the opinion that the United States economy will soon enter a recession as a result of the Federal Reserve’s need to quickly raise interest rates in order to combat decades-high inflation levels.
BTC Price at the time of writing – $19,374.40
Nine months ago, the Fed was failing the course, he stated. Summers stated that although the upcoming recession will not look like the 2008 financial crisis, unemployment could reach 6%.In a year, the economy will be significantly weaker than it is now.
Summers agreed with the current conventional wisdom that a stronger dollar could weaken other economies and tumult currency markets as a result of increased purchases of U.S. debt due to higher interest rates and the safety of Treasury bonds.
He stated that Bitcoin is an experiment, Japan is a nursing home, Europe is a museum, and China is a jail.
Digital assets have been hard hit by recent rate hikes by the central bank and general economic worries. This has put their ability to protect against inflation and caused crypto winter. Summers stated that he hoped the business could learn from its current downturn.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.