BIS Finds Digital Payments Have Yet to Conquer Cash
In a brief today, the BIS Committee on Payments and Market Infrastructures (CPMI) found that digital payments, while rapidly growing, have not supplanted cash. CPMI does report a record high value and volume of cashless payments, crediting this to changing consumer preferences, increasing prevalence of fast payments systems, and COVID, noting that cashless options may also bolster financial inclusion. However, the brief also finds a deceleration in the decline of cash withdrawals, concluding there is still a significant ongoing, if diminishing, demand for cash.
Warren, GOP Allies Grill Silvergate on FHLB Loan, Fed Supervision
Signaling bipartisan plans to take on crypto banking and now also the FHLBs as quickly as possible in the new Congress, senator Warren (D-MA) was joined yesterday by Sens. Kennedy (R-LA) and Marshall (R-KS) in sending another letter to the CEO of Silvergate Bank. Following an earlier inquiry which they said led to an insufficient response, the letter now focuses on the bank’s use of a $4.3 billion FHLB loan as a liquidity backstop. As in Karen Petrou’s recent memos and today’s podcast, the letter focuses on the System’s prior lien ahead of all other creditors (including the FDIC) and the extent to which this puts taxpayers at risk.