A dual Currency Deposit (DCD) is a structured investment product involving two different currencies.
This investment will combine deposit and currency options allowing customers to deposit funds in one currency and withdraw funds in a different currency.
See the following explanation to find out more fully about understanding and how it works.
What is a Dual Currency Deposit?
A dual Currency Deposit (DCD) is a financial instrument structured to help depositors take advantage of the relative differences between two currencies.
This allows customers to deposit in one currency and withdraw money in a different currency if it is profitable.
These products are also known as dual currency products or dual currency services. It is also important to note that a Dual Currency Deposit (DCD) combines cash or money market deposits with foreign exchange options.
Given the currency risk, this Dual Currency Deposit will offer a higher interest rate.
How Dual Currency Deposits Work
A dual Currency Deposit (DCD) is not a deposit in the sense of risky capital. This is because DCD is a structured product consisting of fixed deposits and options. Thus, DCD is a derivative combining deposit money and currency options.
In this case, the investor will use the product to earn higher returns from the better interest paid by one currency compared to another and by relative changes in the currency.
DCD is typically a short-term product for investors who want exposure to both currencies. Both parties must agree on terms, including the investment amount, currencies, maturity, and deal price.
Example of Dual Currency Deposit
The selling point of a Dual Currency Deposit (DCD) is the opportunity to earn much higher interest rates.
Investors can choose to hold their funds in a foreign currency, hoping that the exchange rate will eventually move in their favor, or exchange them immediately to free up funds for future trading.
Suppose an investor lives in country B but knows the short-term interest is more profitable in country A. They will prefer to invest their money in country A where they can realize a better return.
However, if an investor feels the exchange rate of country A’s currency will move against them during the deposit’s life, he can hedge that risk with a dual currency deposit option. The principal will pay the investor in their home currency when it is due.
Advantages of Dual Currency Deposit Investment
So, what benefits will be obtained from a Dual Currency Deposit (DCD)? Last, there are 5 advantages of DCD, which are as follows:
- Deposit one type of asset and receive a return on your investment through two different asset options.
- Don’t worry about market volatility because your return on investment will be adjusted to market conditions.
- It is suitable for short-term investors.
- Various crypto pairs to invest in that.
- High annual yield.
Important to note a Dual Currency Deposit (DCD) be made on Tokenomy. This short-term, high-yield crypto investment opportunity will give you the maximum return on your investment.
However, how to make a Dual Currency Deposit on Tokenomy? Here’s the guide:
- Login to your Tokenomy Account
- Next, click “Get” in your sidebar menu, then select the “Double Currency Deposit” tab.
- Select the pair you want to invest in, then click “Invest.” For example, you can choose the pair BTC/USDT.
- The next step, select the product you want to invest
- Then, fill in the Investment Amount.
- Later, after your selection is successful, you can check the product information in your portfolio.