Dangers of Full Bitcoin: Ex-Finance Ministers Should Know Not to Meddle in Crypto, Says ALEX BRUMMER
The former chancellors are in the headlines. George Osborne has drawn attention for his efforts to strike a deal with Athens over the Elgin Marbles.
Nadhim Zahawi is under investigation for handling his tax affairs. Gordon Brown recently wrote a report on constitutional reform for Labor leader Keir Starmer.
And Philip Hammond is in the spotlight for his decision to take over as chairman of Swiss cryptocurrency start-up Copper.
Crypto jobs: Former chancellor Philip Hammond is in the spotlight for his decision to take over as chairman of Swiss start-up Copper
He declared a “small participation”. Hammond is in good company, as investors include Barclays and billionaire hedge fund entrepreneur Alan Howard.
Hammond says the company based itself in Switzerland because the UK regulator, the Financial Conduct Authority (FCA), was slow to approve the registration.
He fears the UK is in danger of losing to Europe and other hubs in the fintech-crypto space due to its cautiousness.
May be. But a timely report from the Treasury Select Committee suggests there are good reasons to keep the brakes on.
Some 85% of crypto firms that have applied to the FCA for some sort of registration have been unable to demonstrate that they have the systems and standards under its anti-money laundering laws and the financing of terrorism.
He found that key personnel lacked the knowledge, skills and experience to effectively perform their roles and controls.
No one will doubt that Hammond, an effective chancellor who has kept public finances on a sound footing, will bring all sorts of governance skills and judgment to his new post. More questionable, however, is the whole credibility of the crypto.
From the mysteries and energy consumption of bitcoin mining to alleged fraud at FTX and bankruptcies in the industry, his credentials have been seriously undermined.
Crypto businesses have a lot to learn from traditional finance. The blockchain or distributed ledger is widely hailed.
Nevertheless, the transparency it is supposed to provide failed to save the day at FTX and offered a new opportunity to hide things.
As things stand, the bitcoin and crypto markets are highly volatile and a dangerous space. After falling 60% last year, bitcoin has jumped almost 40% in 2023 and some crypto exchange-traded funds (ETFs) have jumped over 80%. Crypto is a market for speculators and thieves.
The FCA is right to give him the cold shoulder. Banks and hedge funds can afford the odd bet, but former finance ministers must preserve their greatest asset.
There is nothing more important than a good name.
Down the hatch
Under the leadership of Ivan Menezes, Diageo has been transformed.
North America is the star with the spirits market share rising from 36% before the pandemic to 44% now, a performance the taciturn Sir Ivan describes as “incredible”.
The focus has recently been on excursions into new areas with Casamigos Tequila, bought from George Clooney and others, among the big winners.
Diageo has also added bourbons such as Bulleit to its portfolio. The real stars are its flagship brands. Guinness at £4 plus a pint is the best beer in the British Isles.
Johnnie Walker book. Diageo’s greatest skill has been in enticing its whiskey drinkers to upgrade with the highly demanded Black Label and even Blue Label.
It has conquered the United States in a way that few British companies succeed, boosting our cash exports.
But a slowdown in sales growth in the first half of the current year disappointed and stocks suffered a setback.
Don’t expect that to dampen his spirit as he continues to add boutique brands to a luxury portfolio.
Provident Financial, the 140-year-old door-to-door moneylender, was in a precarious state when Malcolm Le May took over five years ago.
It was under regulatory control and a former, John van Kuffeler, had launched a bold takeover.
With the help of FCA and this document, the assault was repelled. Le May is stepping down and the Provvy, stripped of its home loans, has rebuilt itself thanks to the Vanquis credit card for the less well off.
It’s a shame when traditional names disappear. But in this case, rebuilding as Vanquis Banking Group may be just as good.