The Fed board of governors could get a cryptocurrency-friendly member

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Posted on: May 22, 2020 5:51 pm EDT

Trump’ recommendation favors crypto, a return to the gold standard

President Trump’s nominee for the Federal Reserve board of governors, Judy Shelton, has been behind the idea of going back to a gold standard monetary system but adding cryptocurrencies to the mix. This might be the first time that a cryptocurrency advocate makes it to this board. As an economic advisor, she has been fighting to “preserve the primacy” of the US currency worldwide through the help of the emerging sector of digital currencies.

“I don’t see it so much as returning [to the gold standard], more like ‘back to the future.’ I think that what a gold standard stands for is monetary discipline for its own sake. Money is supposed to be a unit of account, a reliable measure and a dependable store of value. It really shouldn’t be subject to who’s the chairman of the Federal Reserve,” said Shelton in an interview. She added that she sees a more “futuristic” version of the gold standard that will have a digital currency component added. For her, central banks are “not serving the private sector in providing that reliable unit of account […] under the gold standard, you did have that stability, and I think that’s what’s missing […] it could be used in a very ‘cryptocurrency way.”

Shelton explained that the US needs some sort of a reset from all the “distortions” of the Fed over the last 50 years. “How can a dozen […] people meeting eight times a year, decide what the cost of capital should be versus some kind of organically, market supply determined rate? The Fed is not omniscient. They don’t know what the right rate should be. How could anyone? […] If the success of capitalism depends on someone being smart enough to know what the rate should be on everything . . . we’re doomed. We might as well resurrect Gosplan,” added Shelton, criticizing the power of the Feds to mandate a society that is led by the market.