Home
News
- HSBC’s CEO blames Bitcoin’s volatility and lack of transparency for the bank’s crypto aversing stance.
- The decision comes as Bitcoin plummets over 50%, from an all-time high of $64,895 to trading at around $31,000 over the weekend.
- China’s ban on cryptocurrency trade had a significant impact on HSBC’s decision.
The severely declining Bitcoin was served another blow by one of the world’s largest banking and financial services institutions, HSBC Holdings. Noel Quinn, CEO, HSBC said given the volatility of Bitcoin as an asset class, the banking giant would like to steer clear of the cryptocurrency for the moment.
Quinn declared the biggest European bank would not offer cryptocurrency to clients, blaming its volatility and lack of transparency. The global lender’s crypto-aversing stance contradicts rivals, such as Goldman Sachs, which considers Bitcoin “an investable asset,” and fund management giant Fidelity, which began offering cryptocurrency in 2018.
HSBC Won’t Promote BTC As An Asset Class
Quinn explained bitcoin is “more of an asset class than a payment vehicle.” Its volatility makes operations like “how to value it on clients’ balance sheets” difficult, and so they’re “not into bitcoin as an asset class.” Moreover, the difficulty of assessing who owns them could leave the lender vulnerable to money laundering. However, they don’t plan on imposing their beliefs onto their clients; they just won’t promote it within their “wealth management business.”
Another Blow To Bitcoin
HSBC’s decision comes as the crypto apex, Bitcoin (BTC), plummets over 50% in just 40 days, from its all-time high of $64,895 to trading at around $34,000 on Monday. Following Elon Musk’s Tesla suspending Bitcoin as a payment option and China’s ban of cryptocurrency trade, this is another significant blow to the deteriorating BTC market.
Musk had been one of the biggest Bitcoin advocates with Tesla’s $1.5 billion worth BTC purchase in February.
Reported last Tuesday, China, central to HSBC’s growth strategy, banned financial institutions and payment companies from providing cryptocurrency-related transaction services, as the “speculative trading” was “disrupting the financial order.” According to the People’s Bank of China (PBoC), virtual currency “is not a real currency” and “can’t be used as currency in the market.”
Stablecoins’ Stability Is Relative
Citing some similar reasoning, HSBC is “not rushing into stablecoins” either. While stablecoins “do have some reserve backing behind them to address the stored value concerns,” it still “depends on who the sponsoring organisation is plus the structure and accessibility of the reserve.”
In recent years, the rising crypto popularity has posed a major threat for mainstream banks, creating issues balancing catering to clients’ interests with their own regulatory obligations to understand their customers’ wealth source.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
