The surge in crypto prices may not be solely driven by Trump's bullishness, says veteran economist Judy Shelton.

"The whole decentralized finance movement does reflect less trust in government management of money," Shelton said at the Yahoo Finance Invest conference on Tuesday.

"I consider it a moral contract between citizens and the government that the money perform as a meaningful unit of account and a reliable store of value," Shelton added. "I think it's very healthy to challenge the protected status of the dollar as our legal tender by allowing continual innovation in the sphere of alternative currencies."

Her comments come as bitcoin prices have surged close to $90,000 following Trump's election win, which has crypto faithfuls salivating over the potential for lighter regulations.

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

To that end, Shelton's nomination to the Fed by Trump famously stalled in 2020 amid intense criticism by lawmakers mostly on the left. Some saw her economic ideas as too extreme to be included in the Fed consensus.

That apprehension primarily stems from Shelton's consistent support of the gold standard through the years.

Under such a system, a country's currency is pegged to the value of gold. The government establishes a price for gold and buys and sells it at said price. The value of the country's currency is then tied to this fixed price.

The gold standard came under fire during the Great Depression as people in financial crisis hoarded gold rather than storing it in banks, the St. Louis Federal Reserve Bank explained. Consequently, countries around the world ran out of gold. In effect, they were forced off the gold standard.

The US officially opted out of the gold standard for domestic transactions in 1933 and halted international conversion of dollars to gold in 1971.

Today, the US uses a government-issued currency that's not backed by gold. Otherwise known as fiat money, its value is derived from the government deeming it an acceptable form of payment.

"I think a central bank digital currency would be a monopoly that would be terrible. But I do think that we should keep encouraging it in the private sector. And I welcome the openness of the incoming Trump administration to the cyber community and to crypto," Shelton said.

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Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email [email protected].