For years now, it’s been possible to buy a train ticket in Switzerland at a machine that deals in fiat currency and Bitcoin. Japanese employees have been able to opt for part of their remuneration to be in Bitcoin or other digital tokens. Now, the parallel alternative system comes a step closer to the mainstream.
In what is being hailed as a world-first, a bank-issued stablecoin has been used to carry out an e-commerce payment.
Sygnum Bank’s digital Swiss Franc (DCHF) was used to make a payment on the site of Swiss online retailer Galaxus. The transaction was enabled by Danish digital currency platform provider Coinify.
The value of Sygnum’s DCHF is pegged 1:1 to the Swiss Franc. When used for e-commerce payments, no intermediaries are involved and the transactions happen in real-time with stable values.
The partners say this reduces costs for online retailers by eliminating card systems and protecting against fraud, as well as simplifying and speeding the customer purchase experience.
Historical Performance And IFISA Process Guide
That figure is the result of over £21 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 2019/20 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.