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The credit reporting system is no longer fit for purpose. Built for a different era, it fails to account for the dynamics of modern lending, particularly short-term, high-frequency credit products like BNPL. Instead of helping lenders assess risk and enabling consumers to access fair credit, the current system misrepresents creditworthiness. The solution is not to exclude BNPL data from credit reporting. Nor is it to shoehorn new behaviours into old models. We need structural change. A credit reporting system designed for the 2020s should include: 1) Modern scoring logic: Models should focus on actual repayment behaviour and differentiate between product types. High frequency, short term credit such as BNPL should be assessed in its own context. 2) Real-time data infrastructure: Data should be delivered instantly, through APIs and event driven systems, enabling lenders to see the full picture in the moment it matters. Real time capabilities also allow for responsible product design, like adaptive credit limits and instant affordability checks. 3) Fit for purpose standards: Data formats must accommodate transaction-level detail, flexible repayment schedules, and user context. Standards should evolve with innovation, not lag behind it. A shared taxonomy for short-term credit products is also essential to ensure consistent interpretation.

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With new SEC leadership and defined compliance expectations, banks and companies are moving from experimentation to operational integration — using crypto and stablecoins for cross-border payments, corporate treasuries and programmable money at scale. Major global banks, like ING, are in fact beginning to partner on stablecoin projects, motivated both by the fear of being left behind and the opportunity to define new standards. These are robust, multi-bank consortia aiming for real-world use cases — cross-border payments, corporate treasuries and eventually programmable money at scale. The Lynq network — developed by Arca Labs, Tassat Group, and tZERO — promises real-time, yield-bearing settlements, a marked upgrade from legacy systems that still settle on T+2 timelines. This settlement innovation, which also includes participation from U.S. Bank, is critical for both risk management and unlocking new forms of financial products. Putting an exclamation point on today’s landscape, a Cantor Fitzgerald affiliate business is teaming up with SoftBank and Tether to create a multi-billion-dollar corporate treasury vehicle with the goal of accumulating bitcoin. Upexi, a consumer products firm, is raising $100 million to accumulate Solana, echoing the “corporate treasury as crypto hedge” playbook pioneered by MicroStrategy. This signals not just speculative belief, but operational integration: companies see blockchains not only as investment vehicles but as potential infrastructure for their own business models. Circle’s launch of a stablecoin orchestration layer aims to make stablecoins “invisible” in the best sense: moving money across borders, across blockchains and into the hands of consumers without them needing to understand the underlying tech. Major financial institutions are taking notice, not just with experimental projects but with real investment and product launches. The partnership between CompoSecure and MoneyGram exemplifies this. By enabling cash-to-crypto conversions at thousands of global MoneyGram locations, stablecoins are made accessible to the unbanked and underbanked, potentially reshaping remittance and financial inclusion. With Visa, Mastercard and JPMorgan testing tokenized forms of cash, treasuries and even real estate, we’re beginning to see the outlines of a future where everything of value can be transacted in programmable, composable digital units. Taken together, these three trends — regulatory maturation, the real-world quest for stablecoin utility and the institutionalization of digital assets — mark a turning point. The Wild West days of crypto are fading, replaced by a convergence with mainstream finance. Success could mean a financial system that is faster, fairer and more inclusive, leveraging the strengths of both centralized and decentralized models.

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Fed Gov. Adriana Kugler said the growth of private lending in the wake of the global financial crisis created a market that was relatively immune to the central bank’s restrictive policy stance.  “One implication of this strong growth during this past policy tightening is that monetary policy transmission to private credit markets appeared more muted relative to financing through public credit markets or bank commercial and industrial lending,” Kugler said. Kugler attributed the proliferation of private credit to structural advantages such lenders have over banks, including their ability to offer “higher customization” to borrowers and investors alike. The resilience of nonbank lenders was not the Fed’s only takeaway from its post-pandemic tightening cycle. Kugler said the central bank also learned about the impact of excess savings on monetary policy transmission. She noted that the combination of government stimulus and curtailed spending as a result of COVID-19 social distancing “led the personal savings rate to soar.” The saving glut, she said, effectively created a buffer between consumers and higher borrowing costs. “If households are flush with excess cash, they are less likely to respond to elevated interest rates by curtailing demand,” Kugler said. “Instead, they may have funds to avoid financing or may feel they are able to afford higher monthly payments.” Those excess savings have largely evaporated, Kugler said, allowing monetary policy to impact the economy in a more typical fashion. But, she added, the effects have been more pronounced for less creditworthy borrowers, pointing to credit card and auto loan delinquencies, which have risen above pre-pandemic levels. Kugler said the disparate impacts between prime and subprime borrowers could play out in the inverse, once the Fed resumes lowering interest rates. “For these [lower credit] households, easing monetary policy may have larger effects,” she said. Kugler said financial conditions — namely the willingness of banks to provide credit — have front-run some of the Fed’s monetary decisions. She noted that conditions began easing last year even before the Fed began cutting interest rates in September, which corresponded with an increased demand for loans by households and businesses. But, overall, she said banks have only reduced the interest rates they charge modestly from their post-pandemic peaks and stopped doing so early this year in accordance with the Fed’s pause on policy adjustments. “Banks stopped tightening lending standards after nine consecutive quarters, but they left standards unchanged in January,” she said.

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