Photo

As Treasury secretary, Lawrence H. Summers took on complex economic policy.

On Wednesday night, he took on Bitcoin.

Speaking at the Museum of American Finance on Wall Street, Mr. Summers said Bitcoin, the virtual currency that has become a phenomenon in the technology and financial industries, could help reduce costs and inefficiencies in the global payments system. But so could other payment technologies.

“We have seen so little innovation cumulatively directed at taking the frictional costs out of the system,” Mr. Summers said. “The notion that there’s going to be a lot of innovation and experimentation around how those frictional costs can be taken out feels like a very important kind of idea.”

Video

Although not quite a ringing endorsement of Bitcoin itself, Mr. Summers — who is a special adviser to the venture capital firm Andreessen Horowitz, which has invested in Bitcoin-related companies — did say that new payment technologies would eventually become more ubiquitous, like Internet at hotels or Wi-Fi on airplanes. “There will be a moment when they will go from you are struck by their presence to you are struck by their absence,” he added.

But Bitcoin or any other payments technology, Mr. Summers said, will need to shed the “hyperlibertarian aura,” which is hindering widespread acceptance. Regulation, he added, would certainly help.

“If the day ever comes where Bitcoin counts for an appreciable fraction of commerce that takes place in the world economy, on that day it will be because that commerce is regulated and subject to safeguards and people believe that something other than a mathematical algorithm is ensuring that their money will not be stolen,” he said.

But by then, Mr. Summers had made a gaffe. Midway through his brief discussion of Bitcoin, Mr. Summers referred to the currency’s creator, Satoshi Nakamoto, who holds almost mythical status among Bitcoin enthusiasts, as “Mr. Nakatomi.”

There were gasps. But most of the audience nodded along, perhaps convinced that their ears had deceived them, or they simply didn’t know the difference.