Crypto is not part of HSBC’s future, CEO explains why
Crypto is not part of every bank’s strategy for the future.
HSBC, one of the world’s largest multinational banks, says that it is not so sure about crypto and therefore will not offer any services related to it in the future.
Noel Quinn, HSBC CEO, says:
“I worry about the sustainability of crypto valuations, and I have for a while. I’m not going to predict where it will go in the future.”
In a recent interview with CNBC-TV18, Quinn confirmed that they will not step into the crypto space as exchanges or trading, not now or ever, as they believe that it is not too clearly defined and tested in terms of stability and suitability for many consumers Today.
Image: PaymentsJournal
HSBC is not a fan of Bitcoin
In May 2021, Quinn revealed to Reuters his perspective on Bitcoin as unsuitable for payments because it is difficult to quantify on a balance sheet based on its high volatility. On the other hand, Quinn generally sees it as an asset class.
He also says that due to the volatile nature of Bitcoin, they refuse to endorse or promote it as an asset class.
For the same reasons, HSBC is also wary of jumping into stablecoins. Even if stablecoins have some stored value or are backed by US dollars, it will really still depend on the availability, structure and organization that supports it.
In April 2021, some changes were implemented in the Digital Asset Policy of HSBC Canada which included the suspension of sales transactions or exchanges of products related to crypto.
No security and stability?
Quinn has a rather pessimistic view of digital assets and how it will fit today’s market or consumer base.
Apart from the high volatility of cryptocurrencies, the rise of cyber attacks related to the crypto space has also caused many financial institutions to lose faith and trust in Bitcoin and the like.
In fact, more than 56% of cyber attacks have targeted crypto and were able to hack roughly $1 billion. Lazarus, a notorious hacker group, was able to steal $540 million worth of digital assets on Ronin Bridge and other DeFi platforms. In that light, HSBC does not consider it an asset class.
No to Bitcoin, Yes to Metaverse
Meanwhile, as the popularity of the metaverse grows, more businesses, including HSBC and JPMorgan Chase, are establishing virtual presences.
HSBC in March bought a plot of land within The Sandbox’s metaverse, the first global financial institution to do so.
JPMorgan Chase was the first of the major banks to establish an Onyx lounge in Decentraland, where users could buy real estate using cryptocurrency, a month earlier.
Crypto total market cap at $926 billion on the daily chart | Source: TradingView.com Featured image from SuperCryptoNews, Chart: TradingView.com
