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HSBC Not To Launch Any Crypto Currency Or Services - CEO


05/25/2021


HSBC Not To Launch Any Crypto Currency Or Services - CEO
The Chief Executive of HSBC, Noel Quinn, said that the lender does not have any plans of launching any crypto currency trading desk or offering customers the digital coins as an investment because the bank believes that such digital currencies are too volatile and do not have transparency.
 
These comments from the largest bank of Europe came at a time when there has been an almost 50 per cent fall in the value of the biggest and best known digital currency of the world, bitcoin, from the high it achieved this year. This drop was prompted by the announcement of Chinese regulators of cracking down on mining of the currency in the country and the tempered stance on the digital currency taken by its prominent advocate and supporter Elon Musk.
 
This position with respect to crypto currencies of HSBC is in stark contrast to its rivals such as Goldman Sachs which was reported in Marhc to have restarted its crypto currency trading desk. Another HSBC rival UBS was also reported to be considering ways to offer digital currencies as an investment product top its customers.
 
"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 in reference to the digital currencies such as Tether that are designed to try and avoid the volatility typically associated with crypto currencies by pegging their value to assets such as the US dollar.
 
The pressure on the value of bitcoin has intensified following the reversing of stance on use of butcoin as a means of payment for his company’s cars by the billionaire Tesla Chief Executive and crypto currency backer Elon Musk.
 
However Quinn confirmed his support to the so called central bank digital currencies (CBDCs) which is being considered to be developed by central banks of several coutnrie3s including that of the United States and China.
 
"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," Quinn said.
 
He said the negotiations are being held by his bank and a number of governments about their initiatives to develop CBDC which include countries such as Britain, China, Canada and the United Arab Emirates.
 
The CBDC development effort of China is the advanced among all of the major global economies. Last year its central banker started trials in several cities starting with the country’s state owned banks while a pilot project for cross border use of its CBDC is currently being done in Hong Kong.
 
There were reports in April this year about HSBC imposing a ban on its customers in its online share trading platform from purchasing shares in Bitcoin-backed MicroStrategy and informed its customers that the bank would not facilitate the buying or exchange of products linked to any type of digital currencies.
 
"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," Quinn 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," he added.
 
(Source:www.reuters.com)