Cryptocurrency

Why we need Bitcoin: The next Bank (ING-Bank) now requires Negative interest rates on savings accounts

If consumers keep money in banks, they expect interest. This is one of the reasons why people trump your money under a mattress, in a Savings or in the hotel Safe. However, this financial Trend is changing, because now there are banks, the demand from consumers and businesses for the storage of money. A Situation that would have been ten or twenty years ago is still unthinkable.
This Trend – so that the money Store costs money – could, once again, currencies the value of Bitcoin, other Crypto (such as IOTA, Ripples XRP or Bitcoin to Cash) and a block chain based financial services to demonstrate.

ING on forcing customers to negative interest rates

Since the Great recession of 2008, the Central banks behave in a way that appears to be in comparison to their traditional practices irrational. These institutions have begun to pump through quantitative easing (or “large-scale purchases of assets”), and by reducing interest rates, which are now at the lowest level, you apparently have ever reached, large amounts of money in the economy.
In some countries, the interest rate is effectively at 0 percent, in other countries it is negative. This means that certain creditors pay the borrower.
This is now the case in the Netherlands, where the official long-term interest rate data by YCharts according to -0,14 percent.
The banks had to adjust, of course. ING, one of the largest Dutch banks, announced in late January that they will ask for wealthy clients with an account balance of more than € 1 Million a rate of -0.5 percent. The Amendment is effective for companies from 1. April and for private customers from 1. July in force. The ING has justified this step with the low rates in the Netherlands:

“Due to the persistently low and negative interest rates in the market,” they decided, so ING.

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Only 6.400 customers, the Bank will be affected by this step. Since the Rates are declining, but for years, this could be a precursor of what to Ottornormalverbraucher.
In fact, the Bank confirmed that the interest on Savings accounts sensational with a balance of up to EUR 100,000 0.01 percent of nothing is expected to be effectively so. Zero. Well, since.

Bitcoin and crypto-currencies as a solution

And here is the Bitcoin, crypto currencies and decentralized Finance (DeFi) come into play.
DeFi is probably the easiest way to transport the crypto in the world of yield-free Bank deposits.
Below is a Screenshot of LoanScan.io, a service that tracks platforms, the lending of digital assets on Ethereum-based platforms and centralized platforms offer.
As seen in the table, users can earn an interest rate of 1.5 to 24 percent per year (interest rates are variable), by borrow Stablecoins and even Ethereum on platforms such as dYdX, Compound, or Dharma.

Some services allow customers in the United States, to use their Bank cards to Deposit money directly into DeFi, eliminating the barrier of access to high-yield Ethereum-based investment or savings opportunities will be reduced.
There are also centralized solutions, which will help to make use of the crypto currency, such as the Galaxy Digital-financed BlockFi or Nexo, both with an interest rate of about 8 percent on stablecoins, which can be called up for the US dollars.
Who does not trust the decentralized funding (which admittedly is currently in an early stage and thus open to attack vectors in the Code), for the there is also the possibility to alleviate the negative interest rates, by kept Bitcoin in a Cold Storage solution, which is ahead of the hackers of the world.
Yes, Bitcoin has no earnings and inflates with the time, just like cash – but according to analysts, it is digital Gold, or to a digital value retention means, and should hold its value, theoretically, over long periods of time.

Banks turn to crypto

The Funny thing about all of this is that the banks and financial institutions in the world of Bitcoin and other crypto-currencies turn slowly, ING included. Whether you acknowledge, that the time of Fiat money is due to the low interest rates to the end, however, is not clear.
ING, for example, has started working on a crypto-Custody project. The company should also have other Blockchain projects at the Start, but the details are hardly known.
In a similar way, Fidelity Investments has a Bitcoin and Cryptocurrency trading and custody service for its institutional clients, introduced the assets to the value of hundreds of billion dollars have.
That banks of Bitcoin and other crypto-apply currencies, is a sign that you will see in this sector great potential. Nevertheless, there is a certain contradiction to bitcoin’s premise, a decentralized, Peer-to-Peer movement.

About the author

Eve Manning

Eve Manning

A native Texan, Eve first started out as a Finance Analyst and later realized that her true passion was not in trading but in writing. She leverages her experience in the Finance industry to analyse and write in-depth news articles covering the Cryptocurrencies, Economy & Finance industries.