Regulation for peer-to-peer lenders looks years away
Central Bank regulations for the rapidly growing peer-to-peer lending industry look to be years away.
Comparing crowdfunding to activities regulated under EU legislation is not straightforward, the bank told the Irish Independent.
"The Central Bank of Ireland is actively monitoring developments in both the lending and investment-based crowdfunding markets and continues to work closely with other European authorities in this regard," the bank added.
The Department of Finance said it couldn't put a timeframe on when regulation might be in place.
Peter O'Mahony, founder of peer-to-peer lender Linked Finance, said he is keen for a regulatory regime to be introduced.
"They're probably going to follow the European model, so that probably means that regulation in this space won't come into Ireland for another two years," Mr O'Mahony said.
"The Government have a strategy to try and make the IFSC the centre of fintech, and I think to do that they need to be faster and slicker than the UK and Germany in putting regulation on place."
Earlier this week Linked Finance announced that it had received a €2.5m investment from venture capitalists Frontline Ventures.
It estimates that it will lend €20m to small businesses in 2015. Grid Finance chief executive Derek Butler called for the Government to follow the UK model of regulation.
Mr Butler said four things would be needed for a regulatory regime: anti-money laundering rules, standard client fund protection rules, contingency arrangements in case a lender goes bust, and standard consumer protection laws.
"They're all there and it's just a matter of packaging them under a peer-to-peer umbrella," Mr Butler said.
"What we want is a roadmap for that," he said, adding: "we think that should happen in 2015."
Mr Butler said regulation would help to increase consumer confidence in the sector.