Senior economist Judy Shelton says the rise in crypto prices may not be due solely to Trump’s rise.

“The whole decentralized finance movement reflects declining trust in government management of money,” Shelton said on Yahoo Finance. Investment Conference on Tuesday.

“I see it as a moral contract between citizens and government for money to function as a meaningful unit of account and a reliable store of value,” Shelton said. he added. “I think it is very healthy to challenge the protected status of the dollar as our legal tender by allowing continued innovation in the field of alternative currencies.”

His comments come as Bitcoin prices soared close to $90,000 following Trump’s election victory, leaving crypto devotees salivating. Potential for lighter regulations.

Shelton was an economic adviser on Trump’s first transition team. In the past, he was critical the power of government bureaucracy and the Federal Reserve over the economy and asset markets.

To that end, Shelton’s nomination to the Fed by Trump stalled in 2020 due to intense criticism, mostly from left-leaning lawmakers. Some thought his economic ideas were too extreme to be included in the Fed consensus.

This concern stems primarily from Shelton’s consistent support of the gold standard over the years.

In such a system, a country’s currency is pegged to the value of gold. The state determines the price of gold and buys and sells it at this price. The value of the country’s currency is then tied to this fixed price.

St. The Federal Reserve Bank of St. Louis has stated that the gold standard came under fire during the Great Depression because people in financial crisis hoarded gold instead of storing it in banks. explains. As a result, countries around the world have run out of gold. In fact, they were forced off the gold standard.

The United States officially abandoned the gold standard for domestic transactions in 1933 and stopped international conversion of the dollar into gold in 1971.

Today, the United States uses a government-issued currency that is not backed by gold. Also known as fiat money, its value derives from the government accepting it as an acceptable form of payment.

“I think a central bank digital currency would be a terrible monopoly. But I think we should continue to promote it in the private sector. And I welcome the incoming Trump administration’s openness to the cyber community and crypto,” Shelton said.

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Brian Sozzi He is the Managing Editor of Yahoo Finance. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist statuses, or anything else? Email [email protected].

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