The CEO of HSBC says that the bank is “not into Bitcoin as an asset class,” according to a Reuters report.
He explained that Bitcoin’s price volatility has prevented HSBC from promoting the asset class.
The viewpoint held by HSBC contrasts the likes of Goldman Sachs and BNY Mellon, which have recently taken steps to adopt Bitcoin.
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HSBC’s CEO confirms the bank’s doubts about cryptocurrencies.
HSBC’s Aversions to Bitcoin
HSBC has no plans to adopt Bitcoin, the bank’s CEO has confirmed.
Speaking to Reuters, Neil Quinn explained that the asset’s price volatility has stopped the bank from promoting cryptocurrencies to clients. He 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.”
Quinn went on to say that the bank is “not rushing into stablecoins” for similar reasons. He also said that his aversions to cryptocurrencies stem partly from the lack of transparency in tracking ownership of crypto assets.
Quinn’s confirmation comes weeks after it emerged that HSBC had stopped customers from buying shares in MicroStrategy because they constitute “a virtual currency product.” MicroStrategy holds 92,079 Bitcoin on its balance sheet today; crypto enthusiasts widely criticized the move at the time.
He added that he views Bitcoin as “more of an asset class than a payments vehicle,” and that it is difficult to value because of its volatility. Stablecoins, meanwhile, pose risks depending on the asset’s reserve backing, he said.
HSBC’s views on Bitcoin differ from those of many of the world’s leading investment banks. In recent months, BNY Mellon, Morgan Stanley, and Goldman Sachs have all taken steps to embrace the digital assets space. Goldman published a report on cryptocurrencies last week, investigating the asset’s potential as an “institutional asset class.”
Quinn’s point about the volatility has been proven over the last few days, though. Bitcoin is down 21.9% in the last week after plummeting on news of China’s regulatory crackdown, and Ethereum is down 37.2%. The rest of the market was shaky over the weekend, with some leading DeFi assets falling 25% or more.
“It is too early to call the end of the recent Bitcoin downtrend,” JP Morgan wrote in a Friday report.
Disclosure: At the time of writing, the author of this feature owned ETH, ETH2X-FLI, and several other cryptocurrencies.
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