EXCLUSIVE HSBC CEO says Bitcoin not for us

HSBC (HSBA.L) has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters.

Europe’s largest bank’s stance on cryptocurrencies comes as the world’s biggest and best-known, Bitcoin, has tumbled nearly 50% from the year’s high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support. read more

It marks it out against rivals such as Goldman Sachs (GS.N), which Reuters in March reported had restarted its cryptocurrency trading desk, and UBS (UBSG.S) which other media said was exploring ways to offer the currencies as an investment product. read more

“Given the volatility we are not into Bitcoin as an asset class, if our clients want to be there then of course they are, but we are not promoting it as an asset class within our wealth management business,” Quinn said.

“For similar reasons we’re not rushing into stablecoins,” he said, referring to digital currencies such as Tether that seek to avoid the volatility typically associated with cryptocurrencies by pegging their value to assets such as the U.S. dollar.

Bitcoin traded at $36,387 on Monday, down nearly 50% in just 40 days from its year high of $64,895 on April 14.

Pressure on the currency intensified after the billionaire Tesla (TSLA.O) Chief Executive and cryptocurrency backer Musk reversed his stance on Tesla accepting Bitcoin as payment.

However, Quinn said that he was a believer in central bank digital currencies (CBDCs), which several countries including the United States and China are working on.

“CBDCs can facilitate international transactions in e-wallets more simply, they take out friction costs and they are likely to operate in a transparent manner and have strong attributes of stored value,” he said.

HSBC is talking to several governments about their CBDC initiatives, including countries such as Britain, China, Canada and the United Arab Emirates, he said.

‘DIFFICULT QUESTIONS’

China’s CBDC project is one of the most advanced among major global economies. City-wide trials involving state-owned banks began last year, and there is also a pilot project for cross border use underway in Hong Kong.

China is also involved in a separate project exploring CBDCs for cross-border payments, which HSBC has been involved in.

While Beijing presses ahead with central bank digital currencies, it has stepped up efforts to curb usage of cryptocurrencies.

China, which is central to HSBC’s growth strategy, said last Tuesday that it had banned financial institutions and payment companies from providing services related to cryptocurrency transactions. read more

Reuters reported in April that HSBC had banned customers in its online share trading platform from buying shares in Bitcoin-backed MicroStrategy, saying in a message to clients that it would not facilitate the buying or exchange of products related to virtual currencies. read more

Quinn said his scepticism of cryptocurrencies partly arose from the difficulty of assessing the transparency of who owns them, as well as problems with their ready convertibility into fiat money.

“I view Bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile,” he said.

“Then you get to stablecoins which do have some reserve backing behind them to address the stored value concerns, but it depends on who the sponsoring organisation is plus the structure and accessibility of the reserve.”

The soaring popularity of cryptocurrencies has posed a problem for mainstream banks in recent years, as they try to balance catering to clients’ interest with their own regulatory obligations to understand the source of their customers’ wealth.

Source:-https://www.reuters.com/technology/exclusive-hsbc-ceo-says-bitcoin-not-us-2021-05-24/

RSS Latest Press Release

  • Smart Toilet Market Size to Reach $15181.4 Million by 2027
    Global Smart Toilet Market is valued at USD 7452.1 Million in 2020 and Anticipated to reach USD 15181.4 Million by 2027 with a Growing CAGR of 10.7% over the forecast period. Global Smart Toilet Market: Global Size, Trends, Competitive, Historical & Forecast Analysis 2021-2027, Rising adoption of innovative hygiene technologies such as UV lighting, supportive […]
  • Ideal Keepsake Boxes Add an Extra Touch to Saving Beautiful Memories
    Dallas, TX: November 29, 2021 – Family business Wayfaren is delighted to announce the release of its beautifully understated Keepsake Boxes - an ideal gift for loved ones to safely store treasured memories.   Their Keepsake Boxes, available in either maple or walnut, are thoughtfully designed and meticulously crafted for those who don't want to sacrifice style […]
  • Guru Printers Provides Exceptional Service in Sheet Labelling
    Los Angeles: November 29, 2021 – When it comes to branding your business in the right way, Guru Printers have developed a series of eye-catching solutions to enable companies to stand out from competitors.   With over a decade of printing experience, the Los Angeles-based company has created a robust line of printing services to meet […]
  • Plasterfix Australia Delivers Professional Plaster Solutions for Home and Business
    Alexandria NSW – Plasterfix Australia has increasingly become the go-to plastering services company for businesses and homeowners who are looking for a professional and perfect finish.   Plasterfix is anchored by the skills of master craftsman Pedro Pires, who has been honing the craft of plastering for 30 years. He learnt from his father, who passed […]