News Briefing - Crowdfunding, SME And Alternative Finance

London's financial district, pulsing with money and technology, photographed from the air

1.UK – P2P

Goldman Sachs’ Marcus cuts its rate, and attracts the Mail’s ire.

“Whether a 1.5 per cent savings rate can fall under the banner of all good things must come to an end is debatable.

Nonetheless, Marcus’s easy access savings deal, which was hacked back slightly to 1.45 per cent this week, did provide a welcome shot in the arm for savers.

The consumer banking arm of global mega-bank Goldman Sachs burst onto the UK savings scene just under a year ago with a rate that eclipsed all others.

We had revealed that 1.5 per cent offer was on the cards to This is Money readers a month earlier and Marcus didn’t disappoint them in September 2018 when the deal was actually unveiled.”

2. UK – P2P / AltFi

AltFi reports:

“Britain’s largest peer-to-peer lender and one of the country’s first challenger banks were ejected from the FTSE 250 index. 

Funding Circle and Metro Bank were two of nine firms leaving the country’s second tier of quoted stocks as part of the quarterly review by market owner FTSE Russell.

The peer-to-peer business lender, led by chief executive and co-founder Samir Desai (pictured), has seen the value of its stock fall by more than 75 per cent since it floated last October at 440p as it cut growth forecasts by half. It was at 106p in morning trading.

Metro Bank, founded nine years ago, has seen its shares tumble over 90 per cent over the last year after an accounting error forced it to raise £375m from investors in May.

Neil Woodford’s listed Woodford Patient Capital Trust also dropped out of the FTSE 250, after the former star stockpicker froze his flagship fund in June following a rush from investors who withdrew their money.”

One consequence: indexation funds will no longer hold these stocks…

3. UK – AltFi

FT Adviser says ethical investment is growing.

Key Points

Some parts of ethical investing are going mainstream
Many crowdfunding platforms offer access to ethical investments
The industry needs a common taxonomy

4. UK – AltFi

Investment Week reports that financial crime has ‘reached epidemic proportions’.

5. US – FinTech

The launch of a gold-backed digital token…

“Superintendent of Financial Services Linda A. Lacewell announced on Thursday the New York State Department of Financial Services (DFS) has authorized Paxos Trust Company LLC to offer a gold-backed virtual currency. Lacewell reported that this is the first gold-backed virtual currency that is being offered in New York state. She furthered stated:

“DFS is committed to encouraging innovation while providing regulatory oversight to keep New Yorkers and the rapidly evolving financial services market safe and sound. These approvals reflect DFS’ leadership in the virtual currency arena and our priority to protect consumers in every decision we make.”

Lacewell also revealed that the DFS previously issued a limited purpose trust company in May 2015 to Paxos Trust Company to offer services for buying, selling, sending, receiving, and storing virtual currency. In September of last year Paxo was authorized by the DFS to offer its first asset-backed token pegged to U.S. dollars called Paxos Standard.

“DFS has now authorized Paxos to offer PAX Gold, an asset-backed token that is pegged to gold.  In addition, DFS has also now authorized Paxos to offer BUSD, an asset-backed token that is pegged to the U.S. dollar. In total, DFS has approved three asset-backed tokens issued by Paxos: Paxos Standard (PAX), PAX Gold (PAXG), and BUSD.”

Paxos CEO and Co-Founder, Charles Cascarilla, then explained:

“At Paxos, we appreciate the DFS and Superintendent Lacewell’s commitment to protecting consumers while also supporting financial innovation in New York. We are grateful for the opportunity to offer PAX Gold, the first tokenized gold product to receive regulatory approval. By releasing a regulated product that makes it easy to own or trade gold, we’re using blockchain technology to democratize access to a multi-trillion-dollar market and bring gold into the digital future.”

Cascarilla went on to add:

“With BUSD, we will be introducing the stablecoin concept to even more users in new markets. There is growing interest in regulated, asset-backed tokens and we expect to keep powering more for new uses and applications worldwide.”