Germany’s first bank is imposing a 0.5% negative interest rates to small savings accounts, yet bankers call Bitcoin an experiment.
November 21, 2019, | AtoZ Markets – First German Bank is demanding that savers pay it to hold their money. The bank is demanding payment to hold custody of their money even if it means one euro per account. According to multiple local press outlets, including the Süddeutsche Zeitung, the Bavarian Volksbank Raiffeisenbank Fürstenfeldbruck (VRF) is now charging 0.5% negative interest rates on the smallest deposits.
What this means for small accounts
This means that smaller accounts will not, in fact, be gaining interest but losing, in this new move. According to the bank’s management, they had to do it because of the rising cost of “parking” money at the European Central Bank (ECB).
In Germany, negative interest rates only previously impacted deposits above 100,000 Euros which constituted an interest-free allowance. The new move by VRF makes it the first lender to change this and target savers below that level.
Bitcoin shines in the dark world of negative interest rates
Negative interest rates are slowly beginning to form an integral part of the European central bank’s monetary policy. This means that a portion of savers will have to pay to have their money held. This has made critics warn that people may seek alternatives such as holding their money in cash. Another hot alternative would be holding their money in Bitcoin (BTC).
Bitcoin would be a fitting alternative because it does not suffer inflationary meddling in its supply and associated destruction of its value. This means that HODLers would never be forced to pay to own it. CEO of the German consumer portal warned that the VRF’s move could open the flood gates for people to seek alternatives while speaking to Süddeutsche Zeitung. He said;
“We’re seeing a lot of movement on the market at present,” Oliver Maier said. He noted that the ECB’s decision to cut its benchmark interest rate for banks to -0.5% from -0.4% was the cause of the upset.
The move to impose negative interest rates came from the former president of the European central bank earning him the title “Count Draghila” from Germany’s best-selling newspaper, Bild, showing Graghi as vampires with flangs with the description, ‘Count Draghila is sucking our accounts dry’
In October, entrepreneur and Crypto Bull Cameron Winklevoss noted that cryptocurrency was the only way to avoid paying for ownership of your own money through negative interest rates. Bitcoin could stand to benefit if this materialized even in Bitcoin-cautious Germany.
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