Deutsche Bank is expected to pass on negative interest rates to large corporate customers on deposits. This is according to Deputy Chief Executive Officer Karl von Rohr which mentioned this in a recent interview with Frankfurter Allgemeine Sonntagszeitung.
Meanwhile, Bitcoin (BTC) has registered a price increase of 145% during this year, which makes of it one of the best assets in the market in 2019.
Deutsche Bank Plans Negative Rates To Clients
Deutsche Bank is going to be passing on negative interest rates to larger customers. This is a direct consequence of the negative interest rates that the European Central Bank (ECB) established.
The ECB is trying to incentive spending and credit in the European economy and negative interest rates is the policy they’ve decided to follow.
According to von Rohr, the bank is talking with the clients about the current situation and the clients understand the issue. He went on saying that German banks paid several billion euros in penalty rates for their deposits with the European Central Bank.
While the ECB is penalizing savings and promoting higher inflation rates, Bitcoin became one of the best-performing assets in the market this year.
According to data provided by CoinMarketCap, Bitcoin started the year being traded around $3,740 and it is currently being traded around $9,275.
In 2019, Bitcoin was able to surge to $13,750 and then it dropped to $7,500. Although in the short term some users could be experiencing losses, in the long-term most of them are registering gains.
According to DTAP Capital founder Dan Tepiero, negative interest rates would eventually push younger generations to invest in Bitcoin.
About it, he mentioned:
“Wealth redistribution begins in Germany. Cash deposits of wealthy customers only being charged. Gold should benefit as it is cheaper to hold than cash and will appreciate as an alternative store of value. The younger generations should all hold bitcoin as well.”
Central banks all over the world are currently pushing for low interest rates that discourage savings and encourage spending and consumption.
Banks are offering clients low interest rates that are usually below inflation targets in many economies, something that has a negative impact on society.