CBDCs, Digital Currencies And Cryptos – Plus Loan Latest
We’ve said this before, and we may have to say it again: Central Bank Digital Currencies (CBDCs) are not cryptocurrencies.
It’s in this light we want to view an initiative from the European Central Bank, which doesn’t quite claim that CBDCs are cryptos – they can’t be crypto, as a central banker oversees the central register. However, there’s a clear hope of dominance in the digital, FinTech space.
Central Bank Digital Currencies (CBDCs) could be the answer to the thousand-year search for the holy grail of cross-border payments, according to a new paper from the ECB.
The concept covers a system that is “cheap, universal, and settled in a secure settlement medium,” says the paper.
The search for such a solution is as “old as international commerce and the implied need to pay,” but could be found within the next 10 years.
The ECB explores several options for achieving this, including correspondent banking, emerging fintech services, bitcoin, stablecoins, the interlinking of domestic payment systems, and CBDCs.
The paper concludes that interlinking domestic systems and CBDCs, both interlinked cross-border through an FX conversion layer, are the most promising avenues.
Auction latest… 61 per cent of our latest litigation-funding loan offer has been raised from interested lenders.
- Our new A-rated loan offer, yielding eight per cent over 15 months has landed on site. The amount sought is £250,000.
The loan will close when filled.
The firm specialises in a wide range of legal sectors. These include Dental Negligence, Housing Disrepair, Professional Negligence, Employer’s Liability and Road Traffic Accidents.
Davies&McGrath Credit Application 2 Financial Summary Revenue has increased due to the growth of the conveyancing business although this carries a lower margin. This has also led to a rise in the number of employees, which accounts for the majority of the increase in administration costs. Debt was taken on to help deal with the pandemic and also to help with the increased working capital requirement resulting from the growth in revenue. Further debt is required to fund a substantial personal injury claim.
The business is continuing to grow its conveyancing business with revenues expected to double by 2023. This does not include the revenues from the conclusion of the large personal injury claim being conducted, which is expected to contribute around £780,000 to revenues. The case concerns a site operative at an anaerobic digestion plant.
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 7 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.
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