Zürich-headquartered multinational investment bank Credit Suisse has recently announced that it will soon begin offering negative interest rates on Swiss franc accounts above a certain threshold, effectively charging big savers for holding their fiat cash at the bank. Clients with balances of over 2 million CHF ($2.02 million) will be charged at a rate of -0.75%, and those with balances of more than 10 million CHF will have to pay a higher rate of -0.85%. These changes will be implemented November 15 for business clients and January 1, 2020 for individuals.

In a normal world savers are expected to receive compensation for giving their money to the bank. Instead, due to negative interest rates, we are now seeing more financial institutions actually charging their clients for fiat cash deposits, with Credit Suisse the latest big bank to join in on this practice.

Credit Suisse to Punish Big Savers

The rationale for making such a move, which normally companies will try to avoid as much as possible as to attract big clients, is that the bank itself is disincentivized from holding CHF deposits. This is because the Swiss central bank has already charged financial companies negative interest for deposits for several years now, which already forced UBS, Julius Baer and others to decide to pass on the costs to their clients.

“As other banks have been doing for some time, Credit Suisse is introducing negative interest rates for clients with very high Swiss franc cash holdings”, the bank explained on Friday. “The reason for this is the persistent negative interest rate environment.”

Negative Interest Rates Continue to Spread

Commercial banks in various developed markets around the world have been suffering from the effects of persistently negative interest rates on their business. It is one of the leading causes identified by economists as being behind the current contraction in the global banking sector. Despite this, the practice seems to be spreading as central banks are left with few options to combat economic issues, as rates are already historically low in places such as Germany, Japan and Denmark. Negative rates might make it to the U.S. eventually as well, as the San Francisco Fed recently featured the practice as an important policy tool for fighting economic downturns.

Credit Suisse Is Latest Bank to Charge Clients for Cash Deposits

While negative interest rates on fiat cash is hurting banks’ traditional business of holding and lending money, it presents an opportunity for cryptocurrency ventures to take their place. In fact, 2019 has seen a takeoff in services that offer earning interest on crypto assets. For example, thanks to a partnership between Bitcoin.com and Cred, you can now earn up to 10% on your BCH and BTC holdings.

Crash Worse than Great Depression could arrive in 2020

Bitcoin halving is here with us and sentiment has never been so bullish for post-halving adoption. Sadly for legacy markets, the IMF and Bank of England have forecast the worst economic downturn since the Great Depression

As Bitcoin welcomes its halving on May 12, 2020, several global financial bodies are offering a grim outlook for the global economy. Although BTC has retracted over the weekend to erase recent gains, the picture for the global markets is even worse given expectations that economies are set to crash to levels most of us have never experienced before.

The International Monetary Fund (IMF) and Bank of England (BoE) say coronavirus could see the global economy crash to levels last seen during the Great Depression and the Great Frost of 1709 respectively.

According to the IMF, global governments are instituting response mechanisms to COVID-19 that could see the economy plunged to levels last seen in the Great Depression.

The Bank of England has an even more devastating outlook for the UK economy. According to the UK’s central bank, the economy faces its worst recession in more than 300 years. The BOE released its latest monetary policy report on Thursday, predicting the economy could slump 14% in 2020. That would see it face its highest shrinkage since it declined by 13% in 1709.

Crisis reminiscent of the financial crisis that birthed Bitcoin

The US Federal Reserve is expected to print up to $10 trillion as it looks to cushion the country’s economy. The BoE on its part is set for another quantitative easing (QE) increase following the £200 billion sought in March. All these efforts are in place as millions of jobs are lost due to the virus and what the IMF calls “The Great Lockdown”.

According to Blockstack CEO Muneeb Ali, Bitcoin rose out of an “economic crisis” and the halving presents an opportunity for the pioneer cryptocurrency to “signal to the general public that it and blockchain are not one-off trends…

Ali also points to world governments’ money printing “out of thin air” as something that could begin to disillusion even the average citizens and shift interest to the benefits of Bitcoin.

It has never been a more fitting time to let people genuinely ponder the benefits of Bitcoin”, Ali told Forbes.

OKCoin CEO Hong Fang holds a similar view, noting that this halving finds investors seeing Bitcoin as an asset that is a better alternative to “stocks and fixed income markets.”

At the time of press, Bitcoin is trading at prices just above $8,600 and is set for the halving less than 12 hours away.

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