Imagine a world where a bank customer with a savings account collects interest on his or her deposit. You may be thinking “yes, that’s how banks work” but actually, that’s not the case anymore. Today’s financial climate involves a weird world of super-low (and in some cases) negative interest rates. A trend that many say is here to stay. It’s getting hard to earn USD, EUR or any other fiat currency in a traditional savings account. Hence, YouHodler has a quick tip to teach you how to earn interest on your fiat using our platform.
Before we dive into a solution, let’s first have a little economics lesson. The latest trend in dropping interest rates on bank deposits has roots in Japan and Europe. This strategy came about as a solution to try and strengthen an economy in an era that is uncertain about trading. In theory, making it cheaper to borrow will increase spending and investment. In reality, these super-low rates did help boost stock markets to record highs but as a result, the activity of preserving wealth in savings accounts becomes much more difficult.
To look at a modern scenario, we can see the Federal Reserve in the United States just slashed rates to 0% in an effort to increase spending and offset the crashing economy. Whether that strategy will work remains to be seen but there is one thing that’s for certain:
It’s becoming increasingly hard to earn USD and other fiat currencies the traditional way and as a result, innovative FinTech/Defi platforms are starting to thrive thanks to a new solution of high yield savings accounts.
While YouHodler does not have USD or EUR savings accounts, there are still methods to earn USD and earn interest on your fiat using the platform.
Step 1: Deposit stablecoins or cryptocurrency into the wallet of your choice: YouHodler has Tether (USDT), USD Coin (USDC), True USD (TUSD), Paxos (PAX), Bitcoin (BTC) and Binance Coin (BNB) savings accounts.
Step 2: Start earning interest: earn interest on BTC (4.8%), BNB (3%), stablecoins (12%).
While super low-interest rates do have their benefit to the economy, it has its downsides as well. Thankfully, the arrival of innovative FinTech platforms and distributed ledger technology (DLT) make it easier to fill in the spaces that traditional finance is currently lacking. This is a prime example of the old world and the new existing in a harmonious relationship offering services that are mutually beneficial. With the state of the current market and considering stocks have been long overdue for a bear market, now may be a perfect time to start exploring new financial strategies like this one to make the most of your money.