As most banks are trying to dip their waters into the world of digital currency, HSBC has refused to take on the adventure. In an interview with Reuters, HSBC’s Chief Executive office Noel Quinn revealed that the bank has no plans to enter the cryptocurrency market because of its volatility and opaqueness. A part of his concerns also stems from its convertibility to fiat money.
Most commercial and central banks are now working on their own cryptocurrencies including Goldman Sachs, Bank of England, Central Bank of Norway, and more. The statement from Europe’s largest bank is bad news for the cryptocurrency market which is already struggling with the biggest dip in the year as the market saw a big downfall last week.
The two main reasons behind the fall were Elon Musk’s tweet unveiling that Tesla has banned Bitcoin due to environmental concerns and China’s central bank’s ban of transactions and payments in cryptocurrencies. Most currencies after news broke out fell to their year’s lowest value.
Quinn said, “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,”. Although he expressed confidence in CBDCs which several countries have been working on. He said, “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 revealed that HSBC is in talks with many countries regarding their cryptocurrencies such as Britain, China, Canada, and the UAE.