8.6 C
New York
Wednesday, February 24, 2021
Home Challanger banks Safe haven during a crisis? Revolut backs cryptocurrency as one

Safe haven during a crisis? Revolut backs cryptocurrency as one

Last week Revolut announced that it will provide cryptocurrency to all seven million customers.

At the same time, central banks give unprecedented momentum to their economies to mitigate the harmful effects of the coronavirus pandemic.

Read also: Starling Bank launches a “Connected card” to tackle COVID

This move from one of the fintech unicorns in Europe can open the door to many advantages of digital assets like Bitcoin at a time when mainstream financial markets are experiencing a serious downturn caused by COVID-19.

But then again, there is proof to be optimistic about Bitcoin when viewed as a hedge against inflation.

The European Central Bank has €750 billion committed value of the bond purchase with the potential for this number to increase if necessary.

At the same time, the U.S. Federal Reserve and the Bank of England have announced their intention to buy an unlimited amount of debt to fund government interventions related to coronavirus.

This comes with associated inflation risk and it does worry consumers since savings and investments are likely to be devalued.

This is the main reason Revolut is now offering all users trading in cryptocurrencies, which it announced in an email to customers last week. The company already showed this intention in the area when it recently announced plans to enable customers to buy gold.

On the other hand, Bitcoin is experiencing its first global financial downturn that started only weeks after the collapse of Lehmann Brothers in late 2008.

Still, Bitcoin has often been viewed as a safe haven and one of the few beneficiaries of a widespread decline in financial markets, more and more investors sought refuge in the cryptocurrency, which was decentralized from volatility elsewhere.

This idea is really being tested for the first time.

“The markets are in shock and there are many technical elements that affect their behavior, so it is far too early to say what will prove to be a safe haven,” said Ido Sadeh, founder of Stablecoin SAGA.

“We also have to qualify many of the expectations that Bitcoin is a safe haven simply because it is not connected, which has not yet been met.”

Source:https://www.finextra.com/newsarticle/35608/revolut-backs-cryptocurrency-as-safe-haven-amidst-coronavirus-crisishttps://dailynewsx.in/revolut-supports-cryptocurrency-as-a-safe-haven-in-the-middle-of/

Avatar
Jan Cerny
Jan is an innovation enthusiast and Fintech news reporter. He specializes in news distribution, social media, and content analysis.

Recent posts

TransferWise gets rebranded as ‘Wise’

The rebranded company Wise drops the part Transfer as a signal of moving on from the money-transfer focus of the company.

Revolut about to increase fees and cut number of free trades

Revolut introduced additional fees on its free plan and trading on the Revolut platform will also become more expensive.

Exclusive: An interview with Michael Schweikart, a co-founder of the sustainable banking provider Tomorrow

Tomorrow is a social business FinTech company and a neobank, that was started in 2018 by founders Inas Nureldin, Jakob Berndt, and Michael Schweikart with a vision to use money as a lever for positive change. Since its launch in 2018, the company has 50+ employees and 55,000+ customers.

N26 introduces 100% digital account

The German digital bank has just announced the launch of a 100% digital N26 Standard account equipped with a virtual card.