HSBC Chief Executive Officer Noel Quinn told Reuters that he has no plans to launch a cryptocurrency trading desk or offer cryptocurrencies as an investment to clients as they are highly volatile and lack transparency.
The position of the largest bank in Europe on cryptocurrencies comes at a time when the largest and most famous bitcoin in the world fell by nearly 50% from its highest levels in a year, after China took strict measures on currency mining, and after the prominent defender, “Elon,” relaxed Mask “supported the coin.
HSBC’s stance also contrasts with rival banks such as Goldman Sachs, which previously reported to Bitcoin Arabs that they have restarted the cryptocurrency trading desk.
Given volatility, we don’t view Bitcoin as an asset class, if our clients want to be there, of course they are, but we don’t promote it as an asset class within our wealth management business.
For similar reasons, we are not pushing towards stable digital currencies.
In reference to digital currencies that seek to avoid the volatility associated with typical cryptocurrencies by pegging their value to assets such as the US dollar.
Bitcoin is currently trading at $ 37,764, down nearly 50% from the year high of $ 64,895 on April 14th.
The pressure on the currency intensified after the billionaire CEO and cryptocurrency backer Musk reversed his position on Tesla’s acceptance of Bitcoin as a payment method.
China told last Tuesday that it has banned financial institutions and payment companies from providing services related to cryptocurrency transactions.
Last April, news reports surfaced that HSBC had banned customers on its online stock trading platform from buying shares in Bitcoin’s “MicroStrategy”, explaining in a message to clients that it would not facilitate the purchase or exchange of cryptocurrency-related products.
Coyne said his skeptical stance on cryptocurrencies stemmed in part from the difficulty in assessing the transparency of who owns them, as well as from problems with their convertibility to paper money.
I see Bitcoin as more of an asset class than a payment instrument, with very tough questions about how it is valued on clients’ balance sheets because it is so volatile.
Then there are stablecoins that have some reserve support behind them to address stored value concerns, but that depends on who the sponsoring organization is as well as the reserve structure and accessibility.
The growing popularity of cryptocurrencies has posed a problem for major banks in recent years, as they try to balance meeting customer interests with their own regulatory obligations to understand the source of their customers’ wealth.
HSBC’s stance against introducing cryptocurrencies as an asset class sets it against European competitors such as UBS, which is exploring ways to present it as an investment product according to media reports earlier this month.