US household and credit card debt now hovers at US$18.59 trillion, US$1.23 trillion respectively, with median interest servicing costs at about 15-20%. From the financial perspective of the banks and financial institutions, this represents one of its most profitable non-investment banking business activity, to which the US President now attempts to limit US credit card interests to no more than 10%. Will it work? Or is this just a passing, exploratory possibility? Later in the week we shall know, including Davos.
While peer-to-peer direct lending has been in the works in different places thus far, can stablecoins and tokenized assets play a role in lowering the cost of borrowing? Non-custodial smart contracts like MakerDAO, Aave are mainly a digital collateralized loan product, with exchanges like Bitfinex performing / facilitating the P2P direct consumer loan mechanism. The biggest risk that are currently not addressed? Liquidation at LTV (loan-to-value) threshold is perhaps the largest risk factor for liquidity providers...
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#money #finance #crypto #banks #USeconomy #NASDAQ
Household Debt and Credit Report
Unique data and insight into the credit conditions and activity of U.S. households
