If you remember a world before the 2008 financial crisis, you might be reminiscing about returns far above 5% on your savings and investments. Those days are long gone.
Since one of the biggest financial crashes shook the world in 2008, the global economy has never really recovered. And to encourage consumers and businesses to spend and invest their money rather than holding it, central banks have been cutting interest rates time and again over the last decade - without much success.
And now that interest rates are nearing 0%, the question that arises is whether rates can go much lower? Well, they can. In fact, in some jurisdictions, they have already turned negative. And it’s not unlikely that more will follow suit.
When central bank interest rates turn negative, you will have to pay your bank to hold your deposits. Yes, your bank can actually charge you a fee for storing your money, unless the government makes other provisions.
Fortunately, the US has not reached that stage yet, but earning a return on your hard-earned capital is now just a pipe-dream. And traditional banks marketing their barely-paying products as 'high-yield' accounts is almost scandalous.
Monie is a high-yield interest account that pays you 5% APY on your USD deposits. You deposit USD in your account, and we pay you 5% on it every month. It's that simple.
Good question. In simple terms: we lend your money where it pays. And that is not the traditional economy. Businesses in traditional markets are not willing to pay much for their borrowings given that interest rates are low and capital is widely available.
But USD is in high demand in the emerging digital asset economy. Since the traditional banking industry does not provide finance in this new sector of the economy, businesses are struggling to find working capital. And they are willing to pay for it.
Digital assets are an exponentially growing market. And since the rise of Bitcoin a few years ago, this sector has seen an influx of new businesses and investment.
Demand for USD in this market is high because traditional banks don't lend money to businesses operating in this sector.
If you want to learn more about the digital asset economy, check out our three-part guide that will teach you all the essentials.