IN THIS ISSUE:

  • Will Central Banks Take Currencies Digital?
  • Mortgage Forbearance One Year Later
  • Pets During the Pandemic

I have exactly eight dollars in my wallet at the moment. It’s the same eight dollars that were there fifteen months ago, long before the pandemic began. There just isn’t much need for currency anymore, with the expansion of cashless transacting, e-commerce and electronic wallets.

That’s one reason why I have been confused by the proliferation of cryptocurrencies. Digital transactions in traditional currencies have already taken over; why do we need new, volatile products to push us further in this direction? Many consider bitcoin more an object of speculation than an innovation in payments.

I have also been struggling to understand why the world’s central banks might want to bring forth their own digital currencies, which seem (at least on the surface) to be solutions to problems that don’t exist. But after digging a little more deeply into the topic, I found these efforts to have substantial merit and momentum.


The transformation of payments during recent decades has been remarkable. Cash and checks were once the dominant mediums of exchange, but credit and debit cards began taking over about 35 years ago. Initially only swiped at the point of sale, “cards” became more of a virtual concept with the advent of e-commerce. This facility has been taken to a new level by cashless payment platforms.

As sophisticated as the process appears on the surface, it remains hindered by a series of frictions. Payments must pass from one account to another, which are most often located at different institutions. Each side must confirm the amount and adjust balances accordingly. The banks and networks that facilitate the transaction add charges that can reach 4% of the tab. Transactions pass through a number of computer and payments systems during processing, all of which are vulnerable to service interruptions and cyberattacks.