Year-end funding markets offered a useful reminder that “market plumbing” still matters. On Dec 31, the NY Fed’s Standing Repo Facility saw record usage ($74.6B), largely consistent with typical year-end liquidity tightening and balance-sheet dynamics rather than a stress event.
At the same time, the deposit picture continues to look stable in aggregate—FDIC data show domestic deposits rose for the fifth straight quarter in Q3 2025, with uninsured balances contributing meaningfully to the increase. Yet the “marginal dollar” remains in motion: money market funds closed the year around $7.73T, keeping deposit-vs-MMF allocation in focus.
On the digital side, the conversation is increasingly mainstream. Federal Reserve research is actively analyzing how stablecoins could interact with deposits and financial intermediation, while bank-led initiatives like Europe’s Qivalis highlight momentum toward regulated stablecoin and tokenized-liability models.
Taken together, late-2025 reinforced a theme worth carrying into 2026: liquidity operations, funding mix, and emerging digital rails are becoming part of the same strategic discussion.
Arnab Pandey 