Regular visitors to our News section will be aware that we see central bank digital currencies (CBDCs) as a state-sponsored fake cryptocurrency. The beneficial ownership of an account is quite clear – so there’s nothing cryptic about CBDCs. They are merely digital, and the hope amongst central bankers appears to be that consumers will accept CBDCs as an alternative to real cryptos.
The latest attempt to replicate the qualities of cryptocurrencies is to internationalise CBDCs. Our friends at Finextra report the news.
The Bank for International Settlements has enlisted the central banks of Malaysia, Singapore, South Africa and Australia to test the use of central bank digital currencies (CBDCs) for international settlements.
Dubbed Project Dunbar, the initiative will develop prototype shared platforms for cross-border transactions using multiple CBDCs, eliminating the need for intermediaries and cutting the time and cost of transactions.
The project will work with multiple partners to develop technical prototypes on different distributed ledger technology platforms. It will also explore different governance and operating designs that would enable central banks to share CBDC infrastructures
Technical prototypes of the shared platforms will be demonstrated at the Singapore FinTech Festival in November 2021.
Historical Performance And IFISA Process Guide
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.
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 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.