Dutch banking institution, ING has officially become the second bank in the country to implement negative interest rates on a certain category of user accounts. About 6,400 customers of the bank holding above 1,000,000 Euro ($1.1 million) in their accounts will now face a -0.50 percent interest rate, NLTimes reported Friday.
The latest measures which will come into play from April 1 simply means that instead of receiving income for their cash stored with the bank, customers would have to pay 0.50% of that sum for storing their money with the bank annually.
Notably, the bank’s new rates include personal savings accounts, now attracting a mere 0.01 positive interest rate if the balance held on the account is at or below the 100,000 Euro mark. Customers with funds between that amount and 1,000,000 Euro will not receive or get charged any amount of interest.
As noted at the onset, though, ING is not the first Dutch bank to implement negative interest rates. Earlier this month, ABN Amro enforced the same rates for accounts above 2.5 million Euros with about 5,200 account holders affected, while the country’s cabinet has said they won’t take any steps to prevent banks that decide to charge negative interest rates.
Will Failing Economies Favor Bitcoin Adoption?
The simplest way to understand why central and commercial banks manipulate interest rates is that it discourages individuals and companies from saving cash, but instead to invest in the economy whether the markets are priced accurately or not.
Such an approach, however, has a loophole which is the potential of people losing their wealth once the market bubble is burst. Undoubtedly, it is for these kinds of economic situations that Bitcoin came onto the global scene as an alternative asset class for investors to preserve their wealth.
The big question would remain how well Bitcoin would perform in the cases of a global economic crisis, as it hasn’t witnessed any in its decade-long existence. Coinfomania recently reported that Bitcoin was the best-performing asset of the last decade, and the cryptocurrency is already putting in a strong performance since the turn of the new decade.
Meanwhile, as long as banks like ING and the global economy continue to falter, alternative assets like Bitcoin could be poised to gain increased adoption given its largely decentralized nature, and directly immutability to government policies and control.