Many policymakers have used safeguarding tools to protect funds against loss of value and illiquidity risk, but the rules may not provide sufficient safety in practice. For example, many common law countries require mobile money firms to store funds in a trust. A trust structure aims to ensure funds provided by customers are unreachable by the firm’s creditors during insolvency proceedings. However, upon closer inspection, policymakers may find that such mechanisms are not consistent with the applicable corporate insolvency law. Given the limitations that authorities may have for enforcing these rules, funds provided by customers are sometimes commingled with other assets. These issues are also compounded by the fact that few…
Insolvency Guardian
Insolvency Services & Bankruptcy Advice
