Beware Central Banks Selling CBDC Gifts…
The Norwegians are getting in on the pretend-crypto (aka Central Bank Digital Currency or CBDCs) act. CBDCs are not – repat, not – genuine cryptocurrencies. Cryptos have a decentralised algorithm at the heart of their money system – the maths is on charge, not a central ledger run by a central bank.
CBDCs sound like cryptos, but really they’re just digital monetary accounts overseen by a central bank. The holding is digital in the sense that there’s never going to be a cash note or coin, but that’s as far as CBDCs go down the route of a real cryptocurrency.
We’ve frequently reported and blogged on this before.
Nahmii AS are pleased to confirm that they have been chosen to work with Norges Bank (the central bank of Norway) on their upcoming experimental CBDC (central bank digital currency) sandbox project.
This “prestigious” award confirms Nahmii AS’s position as “a global leader in the blockchain space and represents another milestone for the Bergen-based company.”
Following a competitive tender process, Nahmii AS will now build “a sandbox environment for Norges Bank as part of their CBDC experimental testing strategy.”
Norges Bank will “use this platform as part of a wider investigation into CBDCs.”
Norges Bank will in the experimental testing “consider many available technologies including so-called layer-2 blockchain protocols.”
Nahmii AS are experts in this space, “having built multiple scaling solutions for Ethereum already.”
Layer 2s “allow for the leveraging of public blockchain security, e.g. Ethereum, whilst providing an increased performance and allowing for regulatory compliance.”
The sandbox project “includes both technical and blockchain services, where Nahmii AS will build, maintain and train Norges Bank users and partners on the sandbox environment.
Historical Performance And IFISA Process Guide
- 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 over £24 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.
- Money&Co. has been lending for over 5 years and has only had two bad debts so far, representing a bad debt rate of 0.03 per cent per annum.
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:
- Step 1: Register as a lender. Go to the login page, and go through the process that the law requires us to effect. This means we have to do basic checks on you to comply with money-laundering and other security requirements.
- Step 2: Put money into your account. This is best done by electronic transfer. We can also process paper cheques drawn in favour of Denmark Square Limited, the parent company of Money&Co.
- Step 3: Buy loans in the loan market. Once you’ve put cash in your account it will sit there – and it won’t earn interest until you’ve bought a piece of a loan. It’s this final step that requires lenders and IFISA investors to be pro-active. Just choose some loans – all loans on the Money&Co. site can be held in an IFISA – and your money will start earning tax-free interest.
The ISA allowance for 2020/21 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.