Is your investment portfolio future ready (digital currencies, financial systems and geopolitics)?

The below is not personal financial advice.

If the world feels more unpredictable than ever, you are not imagining it. We are likely entering a decade of extreme change: new financial systems, asset digitization, new digital currencies, and the rise of regional superpowers – along with the conflicts that accompany them. The years ahead may combine periods of market exuberance with shocks similar to “the recession we had to have,” but on a much faster timeline.

As US Treasury Secretary Scott Bessent recently suggested, the US may need a new Bretton Woods‑style realignment. In other words, a new or vastly broader financial and currency system.

No one can predict the future with certainty, but we appear to be at the convergence of several powerful cycles in real time, including the long‑term debt cycle and the empire cycle.

The aim of this article is to outline key changes that will most likely occur, so that your investment portfolio is both protected and ready for opportunity.

When the math stops adding up

We are not socialists; we are pragmatic, logic‑driven economists at heart. The numbers are increasingly not adding up. Many issues that look like social problems are, in our view, symptoms of a stressed fiat financial system (the problem itself).

• Term deposits that once served as a safe retirement anchor, now deliver minimal real returns after tax and inflation is accounted for.
• Equity markets have gone largely sideways in recent years when priced in gold terms.
• Traditionally uncorrelated assets are increasingly moving together during times of crisis.
• Investors face higher taxes, while profitability across many industries is under pressure.
• In Australia, the average house price to disposable income ratio was around 9 times 25 years ago; now it is about 16.5 times.
• Family offices are exiting residential property in Victoria and even markets like London, telling us property is no longer the haven it once was.
• The US is roughly USD 39 trillion in debt and counting, with an annual interest bill at a trillion dollars.
• OECD birth rates sit below replacement rates, signaling couples not having as many children, as well as future demand and labor supply challenges.
• In 1989 the top 1% in the US controlled 23% of the nation’s wealth, today it is about 32%, demonstrating the broader gap in society.

The issue with the US fiat currency system

In a fiat currency system, every new dollar is created as debt, and every dollar of debt comes with interest that must be repaid by future real‑world labor. If any other country had printed as aggressively as the US, its currency would have collapsed. But because the US dollar is the world’s reserve currency for trade and the US can project power militarily to enforce its currency being used, the dollar reigns supreme.

The problem, is that new debt is being created to repay old debt and plug budget deficits. Each new dollar created generates more inflation – especially asset inflation – widening the gap between those who own assets and those who do not. As purchasing power declines and wage growth fails to keep up with asset prices, inflation becomes both a political and economic problem, eventually forcing some kind of reset (political and financial).

US policymakers understand this. While some argue that the US will be forced to “reset” or “default” on its currency outright at some future point, the reality may be more subtle. They may simply change the plumbing of the system and integrate new forms of digital currency.

The changes now underway

The shifts below build on one another, so it is worth following the chain from geopolitics through to digital money and portfolio construction.

1.0 Geopolitical shifts and empire cycles

We are moving from a unipolar, US‑dominated world to a more multipolar system in which BRICS nations are increasingly asserting their influence.

1.1 A US empire in conflict

BRICS countries understand that a direct military confrontation with the US would likely be unwinnable for all sides. The strategy they are adopting seems to be to stretch US resources across multiple fronts the Middle East, Europe, Africa and the South China Sea via proxy conflicts or direct non confrontational engagements.

They also recognize that the real battleground is capital. When the US pushed Russia out of the SWIFT banking system and put sanctions on it, it forced Russia to develop its own payment systems and to trade outside of the US dollar with other BRICS nations. With the aim to steadily weaken the dollar’s dominance and with it the economic privileges the US enjoys from it.

Iran is just one example, as it produces 4% of the world’s oil and sells much of it for Chinese Yuan, which creates a leak in the US global financial system.

At present, Trump is seeking approval for a $1.5 trillion military budget for 2027, alongside substantial cuts to domestic spending. This tells us two things, firstly government funds will increasingly flow to defense related contractors. Secondly global conflict – open or cold – is likely to remain a persistent feature in the years to come.

1.2 USD fiat currency is slowly losing value and could be replaced

We are approaching the end of the long‑term “big debt” cycle, as Ray Dalio explains in detail. At some point, the US will be forced to either:

• back the dollar with something new
• inflate away the real value of its debt
• widen the currency base by creating new forms of currency
• accept some form of default or restructuring, or a combination of some of the above.

This would not be unprecedented. The US dollar has already evolved from being gold‑backed, to being supported by the petrodollar system. A further shift is likely and will interact with the rise of digital currencies.

2.0 New digital currency and digital ledgers (blockchain)

The core component of any new monetary architecture will be digital. The uncertainty is not whether digital money will be central, but which forms will dominate, will it be CBDCs, stablecoins or some other combination of digital currencies.

Let us be clear, this is not a matter of IF, but rather WHEN digital currencies will be the mainstream in our opinion.

What we do know is that central banks around the world are actively preparing for CBDCs, and many are already running pilots. You can track their progress here. At the forefront is the US Federal Reserve and the European Central Bank (ECB).

Although some US states have pushed back against CBDCs, Trump has been a strong supporter of crypto and digital currencies more broadly. US‑dollar stablecoins now have clear support from the US Treasury and are becoming an integral part of the financial system in real time.

2.1 Stablecoins as part of the new mix

The GENIUS Act in the US now requires that US stablecoins be backed one‑for‑one by US dollars or other low‑risk assets such as US Treasuries.

What this means, is that stablecoin issuers can issue stable coins, accept other currencies as payment and purchase treasuries to meet their reserve requirements of 1 to 1 backing. Stablecoin Issuers then earn interest on those treasuries while users hold a digital stablecoin as representation of the US dollar.

This structure does two important things if the process is grown:

• It shifts the main purchaser of US treasuries from the open market and the central banks, to stable coin issuers.
• It promotes stable coins as a form of currency, by which trade can occur.

In effect, the US is using stablecoins, and the issuers of stable coins as a new distribution channel for its debt indirectly.

As of today:

• USDT – Market cap around USD 184 billion
• USDC – Market cap around USD 78 billion

It is not hard to imagine major technology platforms such as Facebook and Google eventually issuing their own stablecoins backed by Treasuries, to further deepen this market.

But all of this begs the larger question, what will happen to bonds in such an environment and their holders?

2.2 Tokenization of assets

BlackRock CEO Larry Fink has outlined a future in which global assets are tokenized on blockchains. You can watch him discuss this here or read more detail here.

In such a world, hundreds of trillions of dollars’ worth of assets would sit on a digital ledger: real estate, legal agreements, debt instruments, private equity, private credit, and most forms of record‑keeping. Think of it as a global, 24/7 stock exchange for almost everything.

Benefits include:

• the ability for investors to buy fractions of assets
• lower transaction and settlement costs
• deeper liquidity between public and private markets

However, there are real risks. Greater accessibility may make it easier for large institutions and investment banks to accumulate assets at scale, inflate prices, and push certain asset classes further out of reach for the average investor or home buyer.

Tokenization could also reduce the liquidity premium that private equity and private credit have historically enjoyed over listed stocks and bonds, potentially compressing returns in those asset classes over time.

2.3 Gold purchases by central banks and Tier 1 status

Central banks now collectively hold more gold than US Treasuries in some cases, with estimates in the USD $5–$6 trillion range depending on price and disclosure. While the exact numbers shift and rely on self‑reporting, one thing is clear: they are actively buying physical gold and gradually diversifying away from US Treasuries and US dollars. Read more here.

On July 1st, 2025, gold was widely reported as being treated as a Tier 1, high‑quality reserve‑like asset under Basel III frameworks. In practice, this means many regulators and banks allow allocated physical gold to be counted at 100% of its market value on bank books, rather than the 50% “haircut” applied in the past.

This development is important because it:

• strengthens the role of gold as a core portfolio asset.
• reinforces the idea that, in times of stress, gold is still viewed as a monetary anchor and ultimate backstop – not just another commodity.

Why is this important? Because we already have digital currencies backed by gold, and BRIC nations have proposed a BRIC digital currency backed by gold.

3.0 The growth of private investments

In the currency turbulence that lies ahead, private investments will grow. We know this because we are actively observing where family offices are deploying their capital to.

3.1 A digitized asset world

In such a market with block chain digited assets, private credit investments, venture capital and private equity investments will all grow. All of a sudden, the friction points that use to exist for entry of new capital will be gone. Imagine being a private lender, wanting to do a second mortgage loan. The digital ledger would already reveal who the first mortgage lender is on the property, their loan amount and terms. Registering a second mortgage loan in that scenario would be seamless compared to the extensive requirements of todays private credit market.

3.2 Private equity and private credit as a way to preserve capital

When governments go up and down, when financial currencies change, people will look to store wealth in real assets. This includes private businesses. Businesses that are private, that have the ability to work cross border, and that can transfer the use of significant IP will be the most desired. We are already witnessing the transfer of wealth into private equity funds from listed funds. But we are not interested in investments in funds, we stress direct ownership is paramount!

What this could mean for your portfolio

All of this will impact your portfolio in the future, and you must ask your self, can my current portfolio withstand these coming changes? Secondly, what opportunities can I take advantage of? We will cover this in our next article, so make sure you subscribe!

For a confidential discussion contact us here.