Pressure Mounts: Pro-Crypto Trump Federal Reserve Nominee Gets Heat Ahead of Potential Vote

TL;DR: Pressure is mounting for US President Donald Trump to once again abandon a Federal Reserve nominee. Administration economic advisor Judy Shelton got the nod from Trump back in July of last year, and recently testified in a Senate confirmation hearing toward that end. As a result, calls for Shelton’s withdrawal include her relatively pro-cryptocurrency views. It’s going to be a battle.   

Pro-Crypto Trump Federal Reserve Nominee Gets Heat Ahead of Vote

“Shelton isn’t even sure a Federal Reserve is necessary. She prefers rigid policies that can’t adapt to economic fluctuations and crises. She’s into cryptocurrencies,” slammed the St. Louis Post-Dispatch (StLPD) in a recent editorial urging the US Senate to reject Trump nominee Judy Shelton for the Federal Reserve Board of Governors.

In one form or another, the StLPD has been around since 1878, more than 140 years. Its distinctly American mid-western editorials give it some influence among the political class, but just how much is very unclear in the digital age. Whatever the case, mainstream media has run with the notion of her nomination being very much in doubt among key Republican senators, the majority party, who have yet to vote on her formally.

Two seats are currently vacant among the Federal Reserve Board of Governors (FRBG), a key policy-making body for the world’s most influential central bank. The present configuration of the FRBG includes Chairman Jerome Powell and six governors, only four of whom are seated. Trump has had a notoriously unlucky time filling those two spots: of the last four tries, three have voluntarily withdrawn from consideration and one was simply snubbed from allowing a full Senate vote on his nomination (it expired).

Permit Healthy Currency Competition

Shelton was nominated last summer, along with Christopher Waller who is described by the StLPD as a “research director at the Federal Reserve Bank of St. Louis and about as uncontroversial as a nominee can be.” Shelton, by contrast, has been an advocate of more closely aligning Fed policy with something akin to the so-called Gold Standard, which claims to act as a restraint on government spending among other benefits, according to proponents. It’s considered by most Fed watchers to be the thought of cranks, economic eccentrics, conspiracy theorists, dreaded gold bugs.

The cryptocurrency ecosystem, however, has followed Shelton’s nomination and progress with great interest. Gold Standard-based economics is fetishized within a large chunk of crypto circles and is widely believed to be the reasoning behind a 21 million hard cap on bitcoin’s inflation rate, considered sound money policy among advocates. And Shelton does seem to be at least literate on the cryptocurrency topic, if not a fan.

Federal Reserve

Back in late 2018, Shelton published a paper with libertarian-leaning American thinktank, Cato Institute. In The Case for a New International Monetary System Shelton explained, “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.”

Updating such a system would mean “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,” Shelton stressed. Again, that was nearly two years ago, and Shelton has since come off radical gold bugism (at least officially), but her understanding of crypto’s importance marks her as a potential game-changing influence upon the US central bank should she manage to be formally confirmed by the Senate.

Bitcoin Cash

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