The Swiss government gets a prod from its own banking association on progress towards a Central Bank Digital Currency (CBDC). As regular readers of this News section will be aware, we have pointed out that CBDCs are digital, but not crypto-currencies. A British CBDC (Britcoin – it’s in development) would mean effectively having a bank account with the Bank of England.
At a time when reserve banks across the globe are increasingly focusing on their digital currency initiatives, Switzerland’s apparent lack of interest in seriously looking into central bank digital currencies (CBDCs) might make the leading European economy less competitive. This, according to a recent analysis and report from the Swiss Bankers Association (SBA).
In a discussion shared recently, the SBA looks at the ongoing global development of virtual currencies and highlights both the opportunities and challenges that CBDCs might pose for the Swiss banking sector.
The paper from the SBA notes that since the Swiss financial and payment systems already work quite well, there may be less pressure to take quick action when it comes to providing a CBDC.
The paper’s authors argue that the short-term benefits of not looking into issuing a virtual currency might include avoiding potential risks for local banks, but it might not be a great idea to avoid CBDC research and possible implementation in the future.
The paper states that it may be presumed that in the absence of an innovative means of payment, the digitalization of the Swiss economy and related business models may proceed more slowly. The paper adds that outdated, legacy systems for payment transactions might not work well with the fast-evolving digital economy. Interoperability with foreign digital markets might become a challenge, the SBA’s research study noted.
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.