Judy Shelton Joins Treasury to Advise on China Currency Policy

Judy Shelton has joined the Treasury Department as an adviser to Treasury Secretary Scott Bessent, prompting cryptocurrency traders to evaluate potential spillover effects for Bitcoin and XRP. The Treasury announced the appointment on Oct. 10, though markets had received early word of the move weeks prior on Sept. 16 through reporting by The New York Times.

Adviser Assignment Targets China Currency Policy

Shelton’s official Treasury portfolio focuses on evaluating financial conditions in China, rather than directing cryptocurrency policy. Her background centers on monetary theory rather than digital assets. In 1989, she authored a book on Soviet economic collapse, followed by a 1994 publication on building a unified international monetary system.

Gold Backing Over Digital Assets

Shelton’s published record demonstrates a consistent preference for gold-backed monetary standards over decentralized tokens. She has long advocated for pegging the dollar to gold and has never called for Bitcoin to serve as a reserve currency. She has noted that crypto fails as a reliable store of value once converted back to fiat currency, while also highlighting the tax drag of spending crypto due to capital gains triggers on individual transactions.

Decentralized Finance Skepticism and Currency Competition

While Shelton maintains skepticism toward specific digital coins, she has expressed openness to currency competition. In a 2018 Cato paper, she proposed that virtual currencies circulate alongside government-issued money. At a Yahoo Finance conference in November 2024, she stated that the decentralized finance movement reflects declining trust in government management of money. Market analysts distinguish this view on monetary competition from an actual endorsement of Bitcoin or XRP.

Yuan Fluctuations and Historical Market Reactions

The primary transmission channel between Shelton’s assignment and digital asset markets runs through yuan valuation and United States-China trade tensions. When the yuan fell past 7 per dollar in August 2019, the Treasury labeled China a currency manipulator, and Bitcoin rallied 8% on the same day despite a simultaneous decline in United States stocks. However, Bitcoin also traded at a discount inside China during that period, complicating safe-haven assumptions. Conversely, heightened geopolitical friction can produce opposing moves, such as when Bitcoin dropped below $80,000 in February 2025 amid tariff uncertainty.