This 'Digital Dollar' Could Create Trillions in New Wealth

by Andrew Zatlin February 24, 2023 1:30 pm ET

What do Amazon (AMZN), craft beer, and Jimmy Carter all have in common?

They were each part of a historical regulatory change...

A change that created new opportunities and trillions of dollars in new wealth.

The thing is, I see the next regulatory change coming down the pipeline. Let me tell you about it...

For a transcript of this video, see below. This transcript has been lightly edited for length and clarity.

This 'Digital Dollar' Could Create Trillions in New Wealth

Not long ago, it was illegal to brew beer at home. Then President Jimmy Carter came along and, with the flick of his pen, changed regulations. Today, craft beer is a multibillion-dollar industry.

The telephone used to be the primary form of communication. But regulations disrupted this industry, too. Now we communicate – as well as work, shop, and consume entertainment – using the Internet. And just like beer, the Internet created mind boggling amounts of new wealth.

You see, when regulations change, opportunities arise. Not only are new businesses created within a specific industry, but existing businesses are dramatically affected – some positively, others negatively.

More importantly, new sources of wealth are born. And that's why I'm bringing up beer and the Internet.

I want to start tracking the next regulatory change. Because I have a feeling it's going to create trillions of dollars of wealth...

And I want to make sure investors like us are in position to capture our share.

A Digital Currency

The next regulatory change is coming down the pipeline. It has to do with what's called a central bank digital currency ("CBDC").

Essentially, we're going to take the standard U.S. dollar and tweak it – we're going to add a little bit of DNA that, historically, has been exclusive to cryptocurrencies.

Let me explain what's going on, because this change will undoubtedly have powerful implications for your money...

What's Going on Here?

Think of a CBDC as a digital dollar.

As you know, we use a version of this currency already. Handling paper green bills is a thing of the past. Today, our paychecks are deposited digitally into our bank accounts. And we use debit and credit cards to make transactions. That's another form of digital dollars.

What will make this CBDC different is the addition of the blockchain.

The blockchain is a digital ledger that records countless transactions. Notably, this technology is decentralized, meaning it's spread across multiple points in a digital network. This makes it a more secure way of conducting business, since it's harder to hack or steal information.

This enhanced security is key. It lowers risk and gives those conducting financial transactions comfort that their money is guaranteed to end up in the right hands.

That's not the only benefit to blockchain technology. Transactions made on this network are also instantaneous. This opens the door to opportunities that our current financial system can't support, simply because payments take too long.

Let's get a broader view of this upcoming currency, though...

The Benefits of a CBDC

With a CBDC, suddenly, transactions will happen securely and continuously. Banks and companies that used to have to keep money in reserves in case of lost funds or unnecessary fees will free up that capital and put it to better use.

Additionally, financial-related companies that were relying on humans to verify and process each transaction no longer will need to do so. That will enable them to trim the fat, lower costs, and free up even more money.

The Federal Reserve has already said that users of its CBDC will spend less to be part of this new way to exchange money (banks have to pay the Fed for the right to use them as a clearing house).

In other words, the cost of doing business for banks, companies, and even individual consumers is going to fall. But is that a good thing?

Winners and Losers

Yes and no. You see, like any regulatory change, we'll undoubtedly have our share of winners and losers.

The winners will be plentiful. The general public, for example, will find it easier and more secure to make transactions. And banks will need less capital tied up and will be able to run their businesses more efficiently.

As for the losers, keep in mind that some companies make money off our current, archaic methods.

Western Union (WU), for example, transfers money from point A to point B and charges a fee for guaranteeing that it'll be there. Soon, this service won't be needed.

Furthermore, the entire crypto industry could be in trouble. This industry's main benefit is its decentralized, secure nature. But if the CBDC offers those same features, suddenly buying cryptocurrencies won't be so appealing.

Finally, while banks may be able to free up cash, they'll miss out on all those fees that come with transfers and overdrafts.

Keep This on Your Radar

Bottom line: We're tinkering with the underlying infrastructure of money. By enacting regulatory changes, new opportunities will present themselves. And we'll see our share of winners and losers when the time comes.

In the meantime, keep this monumental shift on your radar. And check out my investment idea for "Pro" subscribers below. It's a CBDC-related company whose stock could be ready to more than double.

We're in it to win it. Zatlin out.