CryptoPotato
CryptoPotato
  • Crypto News
  • Margin Trading
  • Guides
    • Bitcoin & Crypto Guides 101
    • Bitcoin For Beginners
    • Editorials
  • Fund
  • Buy
  • Language
  • Crypto News
  • Bitcoin For Beginners
  • Cryptocurrency Guides 101
  • Editorials
  • Bitcoin & Crypto Margin Trading
  • Bitcoin Price Analysis
  • CryptoPotato Crypto Fund
  • Ethereum (ETH) Price Analysis
  • Ripple (XRP) Price Analysis
  • Market Updates
  • Interviews
  • Buy Bitcoin with Card
  • bitcoin
    BTC$31,732.00
  • ethereum
    ETH$1,198.38
    • Market Updates
    • BTC Analysis
    • ETH Analysis
    • XRP Analysis
    • Interviews
    Home » Crypto News » Ticking Bomb 2020: Growing Number of Banks Are Introducing Negative Interest Rates

    Ticking Bomb 2020: Growing Number of Banks Are Introducing Negative Interest Rates

    Author: Jordan Lyanchev

    Last Updated Feb 2, 2020 @ 12:51

    Negative rates are becoming exceedingly popular among central and local banks around the world, and the trend extends in Germany with the start of 2020. Amid this, Bitcoin’s pre-programmed inflation rate raises the question if it could serve as a full-on alternative.

    Simply put, having negative rates means that instead of receiving interest income on cash deposits, the banking institutions charge a fee for storing the money. The general idea is to incentivize banks to lend more funds freely, which ultimately should benefit the local (or global) financial situation. However, many people believe that this is an act of desperation that will hurt the economy in the long run.

    One person that supports this idea is the former CEO of the two largest banks in Switzerland, Oswald Gruebel. He criticized the introduction of negative rates in his home country, saying that “money is not worth anything anymore.”

    Another example came just a few days ago from the JP Morgan Chase CEO, Jamie Dimon. Speaking at the World Economic Forum in Davos, he noted that his main concern about the current market situation is the growing acceptance of negative interest rates.

    Negative Rates In Germany 2020

    Germany, the world’s 4th most powerful economy by GDP, maintains the negative rates trend this year as well. According to information compiled by Verivox Financial Comparison, at least 16 new institutions have introduced such rates since the start of 2020.

    German Flag
    Germany, the new player in the negative interest game

    The report indicates that this would affect only new customers. As far as already existing clients go, the banks would have to request their permission individually. This raises a legitimate question – who would agree to start paying fees for storing his funds?

    CSU finance politician, Hans Michelbach, predicts that negative rates will keep expanding, saying that “the spiral will continue to turn.” Moreover, he believes that it will hurt people’s confidence in the traditional banking system.

    Bitcoin, Anyone?

    Banks have been the most trusted and utilized financial service establishments for many years. Yet, it’s worth noting that there hasn’t been a real alternative. As people’s belief in the current system may be fading with the continuous introduction of negative rates, Bitcoin emerges as a viable alternative.

    The largest cryptocurrency is uniquely pre-programmed to have a preset inflation rate. Currently, it’s around 3.6%, but in just a few short months, it will go down to 1.8% after an event called Bitcoin Halving. The protocol can’t be tampered with, hence why no central authority can control the inflation rate.

    Other significant advantages are worth pointing out, as well. For starters, last year, the Bank of America closed the bank account of Ex-PayPal CFO after twenty years of being a customer. Most banks have a fine print in their Terms of Service, where it says that they can shut down an account without any explanations, which is precisely what happened.

    This can’t happen with Bitcoin. Its distributed nature means that there’s no central point of authority, which draws another serious benefit – censorship resistance. In other words, anyone can use Bitcoin’s network, and no one can have a say about it, regardless of wealth, ethnic, political, or whatever else status there is.

    Enjoy reading? Please share:
    Facebook Twitter LinkedIn Telegram
    SPECIAL OFFER (Sponsored)
    Binance Futures 50 USDT FREE Voucher: Use this link to register & get 10% off fees and 50 USDT when trading 500 USDT (limited offer).

    PrimeXBT Special Offer: Use this link to register & enter CRYPTOPOTATO35 code to get 35% free bonus on any deposit up to 1 BTC.

    You Might Also Like:

    • MetaMask Tops 1M Monthly Active Users Following The 2020 DeFi Boom
    • blockchain_cover
      Funding for Blockchain Companies up 79% in 2020
    • crime_cover
      Cryptocurrency Crime Reduced By 60 Percent in 2020 but DeFi Hacks Exploded
    Read more on: Banks Bitcoin Deutsche Bank Germany

    About The Author

    Jordan Lyanchev View more posts by this author

    Jordan got into crypto in 2016 by trading and investing. He began writing about blockchain technology in 2017. He has managed numerous crypto-related projects and is passionate about all things blockchain. Contact Jordan: LinkedIn

  • bitcoin
    BTC$31,732.00
  • ethereum
    ETH$1,198.38
  • Join Our Community

    FacebookTwitter YouTubeTelegram


    ADVERTISEMENT
    binance
    ADVERTISEMENT
    bitmart
    Bitcoin Editorials
    Ethereum 2.0 Staking on Exchange vs. Creating Your Node: What You Need to Know

    Ethereum 2.0 Staking on Exchange vs. Creating Your Node: What You Need to Know

    5 Possible Reasons For Bitcoin’s Price Surge Over $30,000

    5 Possible Reasons For Bitcoin’s Price Surge Over $30,000

    2020 Year In Review: Bitcoin’s Journey From $3800 To Nearly $30K

    2020 Year In Review: Bitcoin’s Journey From $3800 To Nearly $30K

    6 Reasons For The Ongoing Bitcoin Bull-Run Beyond $20K

    6 Reasons For The Ongoing Bitcoin Bull-Run Beyond $20K

    Is Blockchain The Answer To COVID-19 Led Misinformation and Rumor Mongering?

    Is Blockchain The Answer To COVID-19 Led Misinformation and Rumor Mongering?

    Join Our Newsletter
    Become a CryptoPotato VIP
    One Weekly Email Can Change Your Crypto Life.
    Sign-up FREE to receive our extended weekly market update and coin analysis report
    We NEVER send spam. You can unsubscribe at any time.
    Invalid email address
    Thanks for subscribing!
    About
    Advertise on CryptoPotato
    About Us | Contact Us

    Terms of service | Privacy Policy | GDPR
    More Sections
    IEO List | Evaluations
    Airdrops
    Scholarship
    Cannabis Stocks News | Market Analysis
    Disclaimer
    Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. Full disclaimer
    © Copyright CryptoPotato 2016 - 2021
    Scroll to top
    One Weekly Email Can Change Your Crypto Life.

    Sign-up FREE to receive our extended weekly market update and coin analysis report

    We never send SPAM. You can unsubscribe at any moment
    Invalid email address
    Thanks for subscribing!