The future economy will be written on the Bitcoin blockchain, and three key points are given

Simon Johnson, former chief economist of the IMF and professor of global economics and management at MIT, attaches great importance to blockchain. He is a prominent figure in the transition economy. In addition, he believes that global decision makers are also open to the promising distributed ledger.

Simon Johnson, Professor of Global Economics and Management at MIT

He spoke to many MIT alumni and students:

“Central banks, G7 thought leaders, must not try to reject this technology or try to shut it down or even prevent it from developing rapidly.”

In 2009, a newly established podcast called Planet Money had the opportunity to talk with then-U.S. Treasury Secretary Timothy Geithner, just one month after his new boss, President Obama, took office. Johnson also joined Obama's team. As the former chief economist of the International Monetary Fund (IMF), he gave his professional views on the economic crisis.

It was a great moment in the history of podcasting, and Johnson became a regular on the new show.

Johnson made three points about a new moment in financial history: the arrival of blockchain. He was speaking at the 'FinTech and Financial Disruption' conference.

During his brief speech, an energetic Johnson paced the stage, physically expressing his excitement about Satoshi Nakamoto’s immutable innovation, the blockchain, the public database that powers Bitcoin. He made three key points about distributed ledgers and the future of finance from a personal perspective.

The first point — that the transformation brought about by the adoption of blockchain technology will be profound — is based on the hype cycle of bitcoin, but Johnson warned the audience not to judge the technology too much from an American perspective.

“I think the biggest change we’re all going to see is outside of the United States,” he said.

In areas where financial intermediaries are dysfunctional or where currencies are out of control. For example, El Observer reported that an Argentinian company used Bitcoin to dominate the interest rates on consumer loans.

The second point he made came in the form of a question: “What will the protocol look like for how we record these P2P financial transactions?” Will it be a public ledger, like the one that runs Bitcoin? Or a private ledger run by trusted nodes (maybe big banks), enabling large investors to move money in secret? (The Observer proposed a third option: a hybrid ledger.)

“I think it’s going to be the bitcoin blockchain,” Johnson said.

As a professor at MIT, he said, "Here I see employers training excellent engineering graduates." He believes that young talents are often a good leader in the innovation process.

Finally, blockchain-related regulation is coming, but regulators may not be hostile to this technology.

“I don’t think Bitcoin or any other cryptocurrency will replace the dollar, but that’s not the point,” he said.
“You would think that central banks would be very skeptical and resist or try to stop this technology from developing,” he warned. “However, there are a lot of really interesting technical conversations happening.”

In fact, just this morning the Bank of England announced a public consultation period on the interoperability of the system that settles up to £500 billion a day in the UK with a public ledger or blockchain.