Is this the opening of the floodgates? We’ve long been looking at the uses of cryptocurrencies and security tokens, as regularly reported on this site. We’ve also commented on the mixture of fear and envy demonstrated by mainstream finance when it looks at the crypto world. It’s common knowledge that the big banks have been developing their own cryptocurrency technology while maintaining a public attitude of scepticism.
Well, JP Morgan has broken ranks. See the BBC story below. Will this be the first investment-bank cryptocurrency among many?
“US investment bank JP Morgan has created a crypto-currency to help settle payments between clients in its wholesale payments business.
JPM Coin is the first digital currency to be backed by a major US bank.
The crypto-currency, which runs on blockchain technology, has been used successfully to move money between the bank and a client account.
JP Morgan says it sees potential in using digital coins to reduce risk and enable instant transfers.
Although JP Morgan’s chief executive Jamie Dimon has publicly criticised Bitcoin – the first crypto-currency in existence – on several occasions, the bank says it has always ‘believed in the potential of blockchain technology’.”
We’ll update you on our own plans for tokenisation at a later date.
New Loan Offers Expected On Site Soon
Money&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of almost £15 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
A Process Guide To Innovative Finance ISA Investment
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2018/19 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.