The 'Digital Dollar' Has Arrived... What's Next?

RFK Jr. wants to back the U.S. dollar with real assets... Fully on board with that plan... It's more possible than it was two days ago... FedNow has launched... Why crypto projects could benefit... Which ones to watch – and profit from...

Editor's note: In today's Digest, we're bringing you a special guest essay from our cryptocurrency expert Eric Wade...

As regular readers know, Eric is the editor of our successful Crypto Capital and Crypto Cashflow newsletters. And you also might recall that he wrote in the June 27 Digest about the upcoming launch of "FedNow" – an instant digital-payments platform from the Federal Reserve.

Well, FedNow officially launched yesterday...

So Eric is back today to explain why this development is so significant, what comes next, and why certain projects in the crypto space could be set to soar in value because of it.

Take it away, Eric...

The U.S. has a 'sound money' presidential candidate...

Robert F. Kennedy Jr. spoke Tuesday at a fundraising event for his run at the White House.

If he's elected, Kennedy said he would try to make changes to back the U.S. dollar with "hard currencies." By that, we're talking about things such as gold, silver, platinum, and notably... bitcoin.

"Fiat currency was invented to fund wars" and leaves the public susceptible to the "hidden tax of inflation," Kennedy said. His plan to back the dollar with real assets would be "to start very, very small, perhaps 1% of issued T-bills would be backed by hard currency."

But Kennedy believes it's critical to do that because...

Backing dollars and U.S. debt obligations with hard assets could help restore strength back to the dollar, rein in inflation, and usher in a new era of American financial stability, peace, and prosperity.

You've heard plenty of discussion in the Digest for years about this kind of thing, of course. But a presidential candidate voicing ideas about how to make the dollar strong again has sparked quite a conversation in the mainstream media this week...

Some folks immediately began debating the concept of whether it's a good idea or bad idea to support bitcoin. And yes, this is the first overt, pro-crypto, pro-bitcoin U.S. presidential candidate we've seen.

But forget that historic note, if you can...

I (Eric Wade) heard more than one wise financial analyst say over the past few days that even if a president wanted to back the dollar with hard assets, it's not possible. They said it's because the U.S. needs to be able to create dollars on demand.

That's partially true – as things are now. But it doesn't always have to be that way.

Our economy, our consumption, our politics all rely on the myth that our currency is "sound." And yet, the practice of endlessly devaluing it continues.

The government creates umpteen trillion dollars seemingly out of thin air. But it doesn't want anyone to stop believing those magic dollars are a strong, sound currency.

It's a paradox. And we ought to try to break it, by backing the U.S. dollar with assets.

I'm on board.

In fact, you'll be hearing much more about this topic from me. I've been writing a book about improving America that will likely publish next year. One section of it describes why a sound currency can do it – and how one could be backed by gold, diamonds, U.S. real estate, and bitcoin.

Do the math...

The U.S. already has half a trillion dollars' worth of gold, according to the World Gold Council. The student loans the government owns are worth at least another $1 trillion, if they're ever repaid.

Government-owned land is estimated at $1.5 trillion, including national parks that have been valued at close to $100 billion. The government may have mineral rights on billions of acres of land. And estimates put the value of U.S. oil and gas reserves at more than $55 trillion.

My point is...

We could back the dollar with assets, despite how ridiculously we've been increasing our money supply. It sits at nearly $21 trillion today – 35% higher than just before the COVID-19 pandemic. And bitcoin absolutely could be part of the solution.

The plumbing is being laid right now...

After all, the "digital dollar" just arrived.

In a press release yesterday, the Federal Reserve announced the official launch of its "FedNow" digital-payments system.

In the June 27 Digest, I noted that this move was coming. And more importantly, I said that the Federal Reserve's 24/7 payment-settlement system would change the way banks can operate and transactions can be done. It amounts to digitizing the dollar.

Banks that use FedNow don't need to wait several business days to settle a payment. Money can be sent or made available at any time.

Sound familiar?

It should. It's how cryptocurrencies have worked since bitcoin's creation roughly 15 years ago.

As I explained here in the Digest (and in a video presentation last month), FedNow will revolutionize the way finance works in the U.S. It could be a huge tailwind for all the companies that enable the system to work and can protect folks' digital dollars.

I'm talking about the technologies that crypto believers have championed since the financial crisis of 2008. The Fed has been careful not to speak about a connection between these crypto projects and its brand-new digital-payments platform... but it's there.

As I wrote in the June 27 Digest...

Soon after the launch of FedNow, we expect to see an increase in all online and digital transactions... And the government's digital dollar will bring with it more influence on our lives than most people can imagine.

In time, blockchain and digital wallets will become the only technology capable of protecting everyone's digital dollars while we enjoy instant transactions 24 hours a day, seven days a week.

To start, 35 banks and credit unions are using the system. And 16 providers are supporting the processing of payments for those banks and credit unions.

The U.S. Department of the Treasury is also signed up. And the Fed expects more banks and providers to sign on in coming years.

At least two blockchain networks have already said that they'll "connect" to FedNow.

So with that in mind, Robert F. Kennedy Jr.'s idea of backing the dollar with real assets (including digital ones like bitcoin) is more possible today than it was just two days ago.

Here's why this is the start of the digital dollar...

Right now, if someone sends you $20 through Venmo, you'll instantly see it in your account. But the money won't "settle" in the banking system for around three days.

That means you can't use it during that time. And the same thing is true for checks, banking apps, and even direct deposits.

It has been like that since 1972, when the Fed adopted the automated clearing house ("ACH") model. This antiquated system can no longer keep up in today's digital, 24/7 world.

But that's all about to change...

As of today, the largest bank in the U.S. – JPMorgan Chase (JPM) – is using FedNow. It's one of the 35 early adopters. And as I said, the Treasury Department is using it as well.

Eventually, the Social Security Administration, pension funds, and up to 10,000 different financial institutions could use FedNow. That means you'll be able to instantly get your Social Security payments, tax refunds, and direct deposits into your bank account.

According to the Wall Street Journal, FedNow will move $73 trillion a year through the economy quicker than ever before. Fed Chair Jerome Powell said in yesterday's announcement of the FedNow launch...

The Federal Reserve built the FedNow service to help make everyday payments over the coming years faster and more convenient. Over time, as more banks choose to use this new tool, the benefits to individuals and businesses will include enabling a person to immediately receive a paycheck, or a company to instantly access funds when an invoice is paid.

Faster money is only the very beginning...

You see, the Fed also plans to create its own cryptocurrency – dubbed "FedCoin." Other governments around the world are also exploring the idea of creating their own digital currencies.

When these so-called "stablecoins" roll out, cryptos and the blockchain technology they run on will officially go mainstream. Everyday Americans will be able to use them to buy goods and move money.

If crypto payments take over just the retail sector, the market for stablecoins alone would be 4,700% larger than it is today.

That's why my research team and I believe FedNow could be the start of the next crypto bull market. And when the dust settles, thousands-of-percent gains are possible.

With or without FedCoin, cryptos that provide the infrastructure for the dollar going digital (thanks to FedNow) will profit the most. And here's the thing...

You can invest in them right now.

Specifically, I'm talking about the projects developing secure crypto wallets to store, send, and receive coins. And I'm talking about the blockchain technology that makes digital payments easy, secure, scalable, and instant.

To show you what I mean, here's a quick primer on digital wallets...

Just about every crypto investor uses some kind of wallet service. Wallet services make interacting with the blockchain simple, efficient, and easy to understand.

Think of the blockchain like a bunch of vaults in an impenetrable bank...

Wallets offer secure doors to those vaults. Your public key is like the number identifying one vault from another. Meanwhile, your private key or recovery phrase acts like a key to your specific door. That's why you could lose everything if your keys fall into the wrong hands.

Two types of wallets exist in the crypto world – "cold" and "hot."

Cold wallets interact with the blockchain, but they're not connected to the Internet. These types of wallets can be paper, hardware, or even a USB flash drive.

They're generally the most secure type of wallets.

Meanwhile, hot wallets are connected to the Internet – either on your mobile phone or personal computer. So these wallets can link to "decentralized" applications to connect your funds and the service being offered.

But they're a little more risky than cold wallets. If someone accesses your computer or steals and unlocks your phone, they can potentially access your wallet.

Wallets come in a variety of mediums. A wallet can be a web-browser extension, a mobile app, a hardware device, software on your desktop, or even a list of words on a piece of paper.

Each wallet service caters to one or more blockchains. Some are more limited than others.

In other words, everyday folks like you have to sift through all sorts of factors to determine which projects have staying power and which don't. It can get pretty complicated.

That's why we do what we do...

In our Crypto Capital newsletter last month, we recommended a groundbreaking blockchain-technology platform that could help revolutionize the U.S. banking industry.

The value of the network's native crypto token could soar if more developers and companies turn to this blockchain. And as FedNow increases demand for secure digital transactions, that's a real possibility. As I wrote...

That's why we think thousands-of-percent gains are possible.

This month, we've introduced one of the most popular wallets in the crypto world today. It's a "Web3" wallet service – which is a type you can trust. (Web3 is simply the Internet with blockchain functionality.)

Many crypto investors are looking for a wallet that can hold all of their coins and tokens. But given the different blockchains involved, even the best wallets can't hold every crypto in existence.

This one holds a big variety, though. That's a big accomplishment. And it's sure to get noticed by anyone building in the crypto space.

It has a lot of different features going for it as well. And here's where the investment part of the story comes in...

The wallet has its own crypto token, which unlocks special benefits for users. In the future, more utility for this coin could motivate users to buy and hold it – pushing its price higher.

In the end, the moral of the story is simple...

With FedNow – and possibly FedCoin – reaching millions of Americans, blockchains and digital wallets will become more important than ever.

As we've written before, blockchains are shared, immutable ledgers. They're like giant Excel spreadsheets that show a complete transaction history.

Everyone can have their own copies of the spreadsheet. It's completely transparent.

Importantly, this technology will power the digital dollar. And it could actually provide some hope for a dollar backed by real assets.

I've been writing to my Crypto Capital subscribers about this idea a lot lately...

If you're a subscriber who has missed our coverage, be sure to check out last month's issue here, this month's issue here, and this week's weekly update video (which publishes this evening).

As a reminder, Stansberry Alliance members can access all this research as well.

If you don't subscribe to Crypto Capital yet, click here for more information in this video. You'll hear my full thoughts on the launch of FedNow, what I learned over the past four years researching it, and how to start receiving Crypto Capital at a steep discount today.

New 52-week highs (as of 7/20/23): ABB (ABBNY), AmerisourceBergen (ABC), Booz Allen Hamilton (BAH), Berkshire Hathaway (BRK-B), Brown & Brown (BRO), CBOE Global Markets (CBOE), Cintas (CTAS), Global X MSCI Greece Fund (GREK), JPMorgan Chase (JPM), Novartis (NVS), New York Community Bancorp (NYCB), Sprouts Farmers Market (SFM), Shell (SHEL), S&P Global (SPGI), Constellation Brands (STZ), and Verisk Analytics (VRSK).

In today's mailbag, the discussion continues about the war in Ukraine – which was a subject in yesterday's mailbag... and thoughts on the artificial-intelligence ("AI") presentation by Stansberry Research partner Dr. David "Doc" Eifrig and Chaikin Analytics founder Marc Chaikin that debuted on Wednesday night. Do you have a comment or question? As always, e-mail us at feedback@stansberryresearch.com.

"Agree [with subscriber Roger F., who said yesterday that] the bridge bombing timing was totally wrong, strategically given predictable retaliation. However, the rest of the commentary is tantamount to walking away.

"The war is basically a stalemate. Russia marching through the streets of Kiev a month after the Russian invasion began was a monster miscalculation by Putin.

"NATO is basically fighting a war in Ukraine via weapons delivery to deny Putin, encouraged by Western weakness, a victory that would have only led to more territorial conquests elsewhere." – Subscriber Jerral R.

"I watched the presentation last night and decided that investing 'with' AI made sense. I invest in a number of Stansberry products and am quite pleased with the results.

"That being said, I think the impact of AI on jobs was addressed a bit too simply.

"I realize that the presentation was aimed at the small percentage of folks with the capital to be able to do this kind of investing, rather than the general populace. That being said, I think a short but more nuanced discussion of how AI is expected to affect the job market overall would have been appropriate.

"To simply point out it's a great opportunity to make money, and ignore how it could affect the general populace, could be seen as being indifferent. (To be clear, I'm not saying that the participants last night are indifferent, just that one could walk away with that impression when only the monetary upside was emphasized.)

"Will there be a significant impact on jobs in rural areas, or only larger city centers, due to the job types affected? How will it impact older workers, where retraining and finding a new job at 50+ may be quite difficult?

"Imagine being told 'Your job is going away. You need to retrain to do something entirely different, and try to find jobs in your community in this new job field at your age, and with no prior job experience in this new job field.' It's pretty obvious that this would be a tough task, especially when the retraining and job opportunities might be quite limited in the individual's community.

"Going from 'being a blacksmith to learning to make tires,' sounds nice, but is likely a very difficult, or even unrealistic task for many people...

"I recall some months back that you all had lots of commentary on a Bank of England economist that told people to accept being poorer. Similarly, we can't just say to people 'With AI here, many of you just need to accept that your job is going away and you have to fight to build a new life along with everybody else who just lost their job. But hey, AI is making some of us a lot of money!'

"I think it would have still been a positive to convey that aside from there being money to be made, there is recognition that changes due to AI may significantly and possibly negatively impact many people in a number of ways, and that the participants were/are not indifferent to this reality.

"Having said that, the majority of the leadership of the business world and investing communities may be largely indifferent because they aren't experiencing the same economic challenges of the average person." – Subscriber Ellis G.

Good investing,

Eric Wade
Los Angeles, California
July 21, 2023