Ex-Credit Suisse CEO Says Money Isn’t Worth Anything as Bitcoin

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The former CEO of Credit Suisse in Switzerland, Oswald Gruebel, has openly criticized the negative interest rates applied by the Swiss National Bank. In his opinion, money might lose its value if this continues. As negative interest rates are usually introduced to fend off inflation, Bitcoin appears to have the perfect solution.

Negative Rates Across the Board and Credit Suisse Bank

Gruebel was CEO at Credit Suisse from 2004 to 2007 and at UBS Group AG from 2009 to 2011. He offered his opinion on the negative rates in Switzerland, which were introduced in 2015 in an attempt to strengthen the franc:

“Negative interest rates are crazy. That means money is not worth anything anymore. As long as we have negative interest rates, the financial industry will continue to shrink.”

The results in the country have not been as satisfying as expected, and banks continue to suffer. The world’s largest wealth manager, UBS, has reportedly started charging a 0.6% fee on cash savings of more than €500,000.

Negative rates are not only applied in Europe but in Japan as well. Announced by the Bank of Japan in 2016, they hadn’t provided any growth months later.

As previously reported, the former chairman of the U.S. Federal Reserve, Alan Greenspan, has warned that negative rates are on their way to the U.S. as well. He noted that they exist almost everywhere and added: “It’s only a matter of time before it’s more in the United States.”

Negative interest rates mean that instead of receiving money on deposits, customers pay fees to keep their money in the bank. They encourage banks to lend money more freely so that businesses and individuals can invest or spend the money instead of keeping it safely in a deposit account. Naturally, this begs the question of whether there is a suitable alternative.

Bitcoin Solves This

As mentioned above, negative interest rates are used to stave off inflation, among other things. That’s where Bitcoin steps in. The cryptocurrency has a preset inflation rate, currently around 3.7%.

Around May of next year, we will also see the Bitcoin Halving take place. It will affect Bitcoin’s total supply and the inflation rate. The rewards each miner receives for adding a block to the network will be decreased by half. This particular halving will not only reduce the reward to 6.25 per block, it will also decrease the inflation rate from 3.6% to 1.8%.

Moreover, Bitcoin has additional advantages over traditional fiat currencies. For one, it’s a scarce digital object with a finite supply, unlike fiat currencies that are issued at will. Bitcoin’s supply will only decrease from here on out. Basic economic principles dictate that if the supply of an asset decreases while the demand for it goes up or remains the same, this should drive its price up.

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