Institutions Take A Hard Look At Crypto Management And Regulation


Everyone has an opinion, but the opinions are invariably different. Yes, we are talking cryptocurrencies and their management and regulation. Here come two…

First up, Altfi runs a policy statement on crypto policing from Lisa Cameron MP, Chair of the Crypto and Digital Assets All Party Parliamentary Group. She argues lawmakers need keep pace with rapid advancements in technology and crypto.

We are at a critical moment for the UK crypto and digital asset sector. We have seen rapid growth of crypto in recent years. Millions of people in the UK now own some form of cryptoasset and more and more firms now accept payments in crypto including big brands like Gucci and others.

The Government has said it wants the UK to be the global home of crypto and regulators around the world are now racing to develop their own approaches to crypto regulation.

Over the coming months the Crypto and Digital Assets All Party Parliamentary Group will be holding an inquiry into the crypto industry to better understand the key issues in relation to crypto and to ensure we make informed decisions on our approach to crypto regulation.

I am excited by the potential opportunities that crypto presents from innovation in technology, new forms of digital payments, financial inclusion and as a job creator. The UK has some fantastic examples of innovative crypto and digital asset businesses, right across the UK, not just in London, creating jobs and attracting some of the brightest talent in highly skilled roles. 

There is a huge opportunity for crypto to be a force for good whether that’s transforming the way we deal with money and make payments, or through financial inclusion and providing access to finance for minority groups and entrepreneurs.

And a different perspective, from the Bank of England, is aired by Finextra. The media site runs the Bank of England’s view (unfavourable, of course) on cryptos:

If an open and decentralised metaverse grows, the risks from cryptoassets may scale to have systemic financial stability consequences, say a pair of Bank of England wonks.

While still in the early stages of development, the metaverse has been hyped as the next generation of the internet, with Big Tech, led by the rebranded Meta, going big on an idea that Citi has estimated could have an economy worth up to $13 trillion by 2030.

In a blog, Owen Lock from the BofE’s resilience division and Teresa Cascino from its Fintech Hub explore how the metaverse and cryptoassets will affect systemic risk.

An open metaverse will require a means with which to own and transact digital objects which are interoperable between virtual worlds, say the authors, who think that cryptoassets are well placed to take on the role.

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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Tags: Altfi, CBDC, FinTech


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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.