President Trump’s new pick for the Federal Reserve Board is an outspoken proponent of cryptocurrency.
Judy Shelton wrote a paper for the Cato Institute back in 2018, supporting the use of digital assets alongside government-issued fiat.
“If the appeal of cryptocurrencies is their capacity to provide a common currency, and to maintain a uniform value for every issued unit, we need only consult historical experience to ascertain that these same qualities were achieved through the classical international gold standard without sacrificing the sovereignty of individual nations. To the contrary: gold standard rules permit nations to participate voluntarily by operating in accordance with the discipline of gold convertibility of their own currencies.
A modern version of this approach—one that permits the issuance of virtual currencies in tandem with government-issued currencies, adapting legal tender laws to permit healthy currency competition—should be put forward.”
In addition, Shelton urged the US to support advances in financial technology and support an overall policy that “readily accommodates and creatively uses evolving advances in fintech capabilities.”
Shelton is also a strong proponent of gold, and in a recent interview with CNBC blasted central banks for getting in the way of free market capitalism.
“Money is meant to serve as a reliable measure. It’s really the key to free market capitalism. You have to send signals about prices by having clarity. And money is supposed to be that unity of account that provides it. It’s supposed to be a dependable store of value. It’s not supposed to be just another government policy instrument to try to engineer outcomes. And what we’ve seen is central banks trying too hard to do just that.
And they’ve engineered us right into a negative rate scenario, which completely undermines the idea of having faith in the future, which is the very virtue of capitalism. That people have a positive outlook. They think it’s worth it to sacrifice the day to save instead of consuming. To invest that financial seed corn in the possibility of a greater harvest. And it’s that kind of financial intermediation that actually creates a higher standard of living, that brings opportunity and prosperity. That’s what we want to foster. Not a continuing speculative game that’s just played in a $5.1 trillion daily currency market.”
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