The Federal Reserve’s instant digital-payments platform, FedNow, launched last summer, is set to revolutionize the crypto space and U.S. finance. This development is significant, and it’s worth understanding what could come next.
Presidential candidate Robert F. Kennedy Jr. has proposed a “sound money” policy. He suggested backing the U.S. dollar with “hard currencies” such as gold, silver, platinum, and notably, bitcoin (BTC). Kennedy believes that backing dollars and U.S. debt obligations with hard assets could restore strength to the dollar, rein in inflation, and usher in a new era of American financial stability, peace, and prosperity.
The idea of a strong dollar isn’t new, but Kennedy’s proposal sparked a debate in the mainstream media. Some financial analysts argue that it’s not possible to back the dollar with hard assets because the U.S. needs to create dollars on demand. However, this doesn’t have to be the case.
The U.S. government creates trillions of dollars seemingly out of thin air, yet it wants the public to believe in the strength of the currency. This paradox could be broken by backing the U.S. dollar with assets. The U.S. has significant assets, including gold, student loans, government-owned land, and U.S. oil and gas reserves. These could be used to back the dollar, despite the increase in our money supply, which sits at nearly $21 trillion today, 35% higher than just before the COVID-19 pandemic.
The “digital dollar” has arrived with the launch of the Federal Reserve’s “FedNow” digital-payments system. This system allows banks to settle payments instantly, a feature that cryptocurrencies have offered since bitcoin’s creation roughly 15 years ago. FedNow could revolutionize U.S. finance and be a huge tailwind for companies that enable the system to work and protect digital dollars.
The launch of FedNow is expected to increase online and digital transactions. Blockchain and digital wallets will become the only technology capable of protecting everyone’s digital dollars while enabling instant transactions 24/7. Currently, over 100 banks and credit unions are using the system, and more are expected to sign on in the coming years.
The Fed also plans to create its own cryptocurrency, “FedCoin.” Other governments around the world are exploring the idea of creating their own digital currencies. When these “stablecoins” roll out, cryptos and the blockchain technology they run on will officially go mainstream. If crypto payments take over just the retail sector, the market for stablecoins alone would be 4,700% larger than it is today.
FedNow could be the start of the next crypto bull market, with thousands-of-percent gains possible. Cryptos that provide the infrastructure for the dollar going digital will profit the most. This includes projects developing secure crypto wallets and blockchain technology that makes digital payments easy, secure, scalable, and instant.
With FedNow – and possibly FedCoin – reaching millions of Americans, blockchains and digital wallets will become more important than ever. This technology will power the digital dollar and could provide some hope for a dollar backed by real assets.
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