German Volksbank Now Charges 0.5% Negative Interest On Crypto

The Bitcoin-cautious Germany is now seeing the first bank demand that ordinary savers pay to hold their money – which goes as little as €1. This move was reported in the Bitcoin news by several local press outlets including the Süddeutsche Zeitung which on November 19 reported that the German Volksbank is now charging a 0.5% negative interest rates on the smallest deposits.

The Volksbank Raiffeisenbank Furstenfeldbruck (VRF) and its management said that they “had to do it” as the publication quoted. The reason for that, as they said, was the cost of “parking” money at the European Central Bank (ECB).

In Germany, the negative interest rates previously impacted only the deposits above €100,000 which mainly included an interest-free allowance. However, the latest move by the German Volksbank makes it the first lender in the country which is targeting savings below this level.

“Recently, more clients have been coming to us from other banks where they’ve already used up their allowance,” the management continued.

Many media outlets were in the cryptonews stating that negative interest rates are beginning to form part of the ECB’s monetary policy. This phenomenon ultimately means that some portion of the savers must pay banks to hold their money.

Even critics weighed in their opinions and warned that moves like the one of German Volksbank would now incentivize the public to move into cash. The alternatives such as Bitcoin (BTC) also stand to benefit. In contrast to this, Bitcoin does not suffer from the inflationary meddling in the supply and the destruction of its value. This means that HODLers would never be forced to pay to own it.

Last month, the co-founder of Gemini exchange and entrepreneur Cameron Winklevoss said that cryptocurrency is the ideal method of escaping negative rates on bonds, which account for total investments worth $17 trillion. Today, the German Volksbank proves the opposite.
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The CEO of a German consumer portal also warned that Volksbank could “open the floodgates” with this move. As Oliver Maier noted, “we’re seeing a lot of movement on the market at present,” adding that the ECB’s decision to cut its benchmark interest rate for banks to -0.5% from -0.4% was the true cause of the upset.

The decision comes in tough times for the market, as Bitcoin lost support on $8,000 and is now trading in the lower areas.