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Dangers of going all-Bitcoin: Former finance ministers should know better than to meddle in crypto, says ALEX BRUMMER
Former chancellors make headlines. George Osborne has drawn attention to attempts to make a deal with Athens over the Elgin marbles.
Nadhim Zahawi is under investigation for the handling of his tax affairs. Gordon Brown wrote a recent report on constitutional reform for Labor leader Keir Starmer.
And Philip Hammond is in the spotlight for a decision to assume the chairmanship of Swiss-based crypto-currency start-up Copper.
Crypto Job: Former Chancellor Philip Hammond is in the spotlight for his decision to take on the chairmanship of Swiss-based cryptocurrency startup Copper
He has declared a ‘minor interest’. Hammond is in good company as investors include Barclays and billionaire hedge fund entrepreneur Alan Howard.
Hammond says the company has moved to Switzerland because Britain’s regulator, the Financial Conduct Authority (FCA), has been slow to approve registration.
He fears that the UK risks losing out to Europe and other centers in the fintech-crypto space because of its caution.
Could be. But a timely report from the Treasury Select Committee suggests there is good reason to keep the brakes on.
About 85 percent of crypto companies that have applied for some form of registration with the FCA failed to demonstrate that they have the systems and standards in place under anti-money laundering and anti-terrorist financing laws.
It found that key personnel lacked the knowledge, skills and experience to effectively perform their duties and controls.
No one will doubt that Hammond, an effective chancellor who kept government finances on track, will bring all kinds of management and judgment skills to his new job. More questionable, however, is the entire credibility of crypto.
From the mysteries and power consumption of bitcoin mining to the alleged fraud at FTX and industry bankruptcies, its credentials have been seriously undermined.
Crypto companies have a lot to teach traditional finance. The blockchain or distributed ledger is widely praised.
Nevertheless, the transparency it would provide failed to save the day at FTX and opened up new opportunities to hide things.
As things stand, the bitcoin and crypto markets are highly volatile and an insecure space. After falling 60 percent last year, bitcoin is up nearly 40 percent in 2023 and some crypto exchange traded funds (ETFs) are up more than 80 percent. Crypto is a market for speculators and rogues.
The FCA is right to ignore it. Banks and hedge funds can afford a little extra, but former finance ministers should keep their biggest asset.
Nothing is more important than a good name.
Under the hatch
Under the leadership of Ivan Menezes, Diageo has been transformed.
North America is the star with share of the spirits market rising from 36 percent pre-pandemic to 44 percent today, an achievement the taciturn Sir Ivan describes as “amazing.”
There has been a lot of focus lately on field trips to the new territories with Casamigos Tequila, bought from George Clooney and others, among the big winners.
Diageo has also added bourbons like Bulleit to its portfolio. The real stars are the core brands. Guinness at £4 plus a pint is the best beer tip in the British Isles.
Johnnie Walker delivers. Diageo’s greatest skill has been encouraging its whiskey drinkers to move up the ranks with Black Label and even Blue Label which are in high demand.
It has conquered the US in a way few British companies succeed, boosting our cash exports.
But a slowdown in revenue growth in the first half of the current year was disappointing and stocks suffered a setback.
Don’t expect this to dampen the mood as it continues to add boutique brands to a luxury portfolio.
New clothes
Provident Financial, the 140-year-old lender, was in dire straits when Malcolm Le May took over five years ago.
It was under regulatory scrutiny and an alumni, John van Kuffeler, had launched a bold takeover bid.
With the help of FCA and this newspaper, the attack was repelled. Le May is retiring and the Provvy, stripped of its door-to-door loans, has rebuilt itself with the Vanquis credit card for the less fortunate.
It’s a shame when traditional names disappear. But in this case, the rebuilding as Vanquis Banking Group might as well be.