Gibraltar Ushers Cryptos Into Mainstream – Plus Loan Latest

We’re nicely into the new tax year. And our thoughts turn to plans for the future. The jury remains well and truly out on cryptocurrencies, although the sector has attracted a lot of interest from punters (hard to call them investors) following the 20 per cent surge in the price of Bitcoin in the past fortnight.

We’re reserving judgement on cryptos and security tokens, but a couple of interesting ideas for tokens linked to real-world assets have come across our desks in recent months.

Meanwhile, we see another move to take cryptos into the mainstream. We reproduce an excerpt of a recent article in AltFi. We shouldn’t need to stress the need to take professional advice before even thinking about committing capital to one of these exotic asset classes – but we do, anyway: don’t think about investing without taking proper advice.

The Gibraltar Stock Exchange (GSX) has begun listing digital debt and digital fund securities, making it one of the first regulated markets in the world to use this technology.

The exchange will list these securities using blockchain technology on its secondary GSX Global Market.

It said the Gibraltar Financial Services Commission had granted it permission to use distributed ledger technology to list corporate bonds, convertible bonds, asset-backed securities, derivative securities, open-ended and closed-ended funds in digital or tokenised form.

“We aim to leverage blockchain to open up greater liquidity pools, making illiquid assets more accessible, and set the foundations to better democratise capital markets,” said Gibraltar Stock Exchange chief executive Nick Cowan. “Offering the listing of digital debt and digital fund securities significantly widens the potential GSX user base in respect of both Members and Issuers.”

The British Overseas Territory exchange, on Spain’s southern coast, runs two markets. It operates the GSX Main Market, and the GSX Global Market, a lower cost, lighter touch reporting bourse, which will be used for blockchain trading.

8% Yield Loan – 78% Subscribed

The latest property-backed £250,000 loan from Seascape is now more than 78 per cent subscribed. This A-rated tranche yields 8 per cent gross, at a fixed rate for five years. As is the case with earlier tranches of credit, we have used our best efforts to ensure the truth of the assertions made, but cannot warrant their absolute accuracy. Fuller detail is available to logged-in members.

A Process Guide To Innovative Finance ISA Investment

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.

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 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.


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Disclaimer: Money&Co.™ is the trading name of Denmark Square Limited, Company Number 08561817, registered in England & Wales, authorised and regulated by the Financial Conduct Authority (FCA). The company is identified on the Financial Services Register under Reference Number 727325. The registered office is 58 Glentham Road, Barnes, London, SW13 9JJ where the register of Directors may be inspected. Denmark Square Limited (ISA manager reference number Z1932) manages the Money&Co. Innovative Finance ISA.