Finance Minister Steven Mnuchin was not the only one who made waves in the US Senate this week when it came to the future of currencies. Tom Cotton, a Republican senator from Arkansas, spoke extensively about digital currencies while speaking to the cameras and a candidate for the Federal Reserve Board of Governors, Judy Shelton:
“We need the digital currency a little less, I would argue internally, but rather to preserve the primacy of the dollar worldwide.”
When asked how she would protect the dollar as a reserve currency and what this would mean with a digital dollar, CoinDesk said Mrs. Shelton said:
“I think this is an extremely important discussion and I agree with your opinion: I think we are forced to think about it.”
Ms. Shelton is one of the two nominees for the undergoing confirmatory hearings. The other is Christopher Waller, research director at the Federal Reserve Bank of St. Louis. She has not shrunk from controversy when it comes to her views on currencies and the American economy, which has long advocated a return to the gold standard, which has been abandoned in the United States since 1971.
Cotton’s comments related to the digital currency initiatives being implemented by both companies and Facebook as well as China’s own central bank. Facebook plans to launch their own cryptocurrency Libra in 2020, while the People’s Bank of China has taken additional steps to digitize the renminbi.
Such actions in the public and private sectors can have a negative impact on the US economy if it doesn’t keep track of time. A discussion about a digital dollar is certainly very important for the Federal Reserve.