Former US Treasury Secretary Larry Summers believes that blockchain can succeed without Bitcoin!

Rage Review : Former US Treasury Secretary Larry Summers made an in-depth analysis of emerging financial technologies such as blockchain and Bitcoin in a fireside chat at the 2016 Consensus Conference. He believes that digital assets have the potential to become a global currency to store value, but he believes that the underlying technology will be more influential. Blockchain technology can succeed without Bitcoin, and he believes that new market entrants are more likely to successfully develop new technologies. Even if digital currencies fail, he believes that blockchain technology will subvert corporate finance.

Translation: Nicole

Former U.S. Treasury Secretary Larry Summers participated in a fireside chat at the Consensus 2016 conference today, during which he provided an in-depth analysis of emerging financial technologies such as blockchain and Bitcoin, and their impact individually and in combination.

Edited by Fortune Magazine ’s Alan Murray, the conference saw Summers draw a line under the world of Bitcoin and blockchain, as he believes it will reduce competition, but the technology will bring greater changes to economic processes.

Summers predicts three outcomes of this reform: blockchain will coexist with traditional fiat currencies; blockchain will be activated by Bitcoin; and blockchain will eventually interact with digital currencies, but not Bitcoin.

While Summers still believes that digital assets have the potential to become a global currency or store of value, he believes the underlying technology will be more influential.

Summers told the audience:

“Is blockchain technology a foundational technology? The answer is of course yes. Will Bitcoin become a valuable way to store value like gold? I don’t know, but I don’t deny it.”

Summers currently foresees different ways to make the switch in the financial system.

He said he believes, for example, that companies like JPMorgan Chase could make Bitcoin the same as traditional currencies like the dollar and the euro.

However, he believes the transition depends on how quickly it gains traction in the market.

He sarcastically said:

“Bitcoin has the same function as a fax machine. A fax machine is a doorstop, and anyone who has a fax machine in this world owns something very valuable.”

Re-understanding Bitcoin

Larry Summers

Summers wouldn't directly confront the industry's innovators, saying the underlying technology can be replicated in a variety of ways.

He said:

“Some people argue that you can’t get the benefits of blockchain without Bitcoin, but we can always find ways to get those benefits without Bitcoin.”

But he noted examples of disruptive change, where new market entrants are more likely to successfully develop new technologies, and even if digital currencies fail, he believes blockchain technology will disrupt corporate finance.

He added:

“I cannot confidently make predictions for today’s large financial institutions and the aspiring people here. I don’t think it’s right to say that today’s financial institutions are the world of blockchain and Bitcoin.”

But Summers doesn't think it should be stopped by regulators, even if it affects the economy.

He added:

“I don’t think we should be setting our policy on the premise of maximizing employment in the financial sector.”