Judy Shelton, during her Senate confirmation hearings for the appointment of Federal Reserve Board of Governors, emphasized that the digitization of the US Dollar will sustain its dominance in the global economics.

As a monetary economist and a staunch supporter of Stable Money and an advocate of the gold standards, she advocates that the US dollar should be linked to gold like the monetary policy in 1913 and 1971 in the US.

Sheldon said, “Yes it is dominant reserve currency but we can't rest on our laurels in that regard. I think it is very important that we get ahead of the curve dollar continues to offer the best currency in the world.”

When she was asked about the need for the digital dollar she said that it is an extremely important discussion and we are now compelled to think about that.

Does Sheldon’s Opinion Matters?

Judy Sheldon’s comments came after China's decision to launch its own digital currency in the wake of the Facebook proposed Libra project. These significant developments have compelled several European nations to seriously consider launching their own digital currency.

Judy's opinion might not be considered significant being the single member with diverse opinions from the twelve member Federal Open Market Committee (FOMC). The FOMC’s decisions are usually unanimous decisions that carry mere rubber-stamped importance.

Judy Sheldon has always had opposed the federal easy money policy and has been advocating the gold standard for a long time. In one of her articles, published by libertarian Cato Institute in 2018, she has stated that gold standard rules permit nations to participate voluntarily by operating in accordance with the discipline of the gold convertibility of their own currencies.

She further said that the modern version of this approach could be digital currencies in tandem with government-issued currencies.

Sheldon Advocates ‘Gold Standard’ Monetary Policy used by the nation for almost 60 years

Recently Sheldon has faced heavy criticism due to her support lent to President Trump's proposal to cut down already low-interest rates. She has thus been nominated for the Federal Board along with Chris Waller, Director of Research at the Federal Reserve Bank of Saint Louis.

Sheldon’s recent statements signify that she is wary of so many innovations simultaneously and would prefer to maintain the old day's normalcy including the cutting down of interest, which was not existent before the 2008 economic crisis.

Several economists believe that Sheldon’s proposal for the age-old monetary policy used from 1789 to 1971 might be viable in this new digital age.

Jayashree Ingle

CBW - External Analyst

INDIA