Noel Quinn’s comments came when Bitcoin fell by almost 50%
HSBC will not offer Bitcoin as an asset class anytime soon, according to comments made by the bank’s chief executive, Noel Quinn.
The British banking entrepreneur, who was appointed CEO of the HSBC Group in March 2020, told Reuters that the bank “does not like Bitcoin as an asset class” due to the “volatility” of the cryptocurrency.
“We are not promoting it as an asset class within our wealth management business,” he said, adding that, “for similar reasons,” the bank “is not rushing into stablecoins.”
Quinn’s comments come as Bitcoin fell from this year’s record of more than $ 64,000 to just over $ 29,000, down more than 50%.
Meanwhile, China, where around 65% of all global mining is based, has announced a crackdown on mining and trade behavior, forcing cryptocurrency exchange platforms to suspend operations. Although Quinn made no mention of China in his comments, recent events may have influenced HSBC’s decision because the country is inherent in the bank’s growth strategy, according to Reuters.
“I see Bitcoin more as an asset class than a payment vehicle, with very difficult questions about how to value it on customers’ balance sheets because it is so volatile. So you come to stablecoins that have some reserve behind them to deal with concerns about stored value, but that depends on who the sponsoring organization is plus the structure and accessibility of the reserve, ”he said to the publication, adding that his skeptical approach in relation to Bitcoin stems from the difficulty of assessing the transparency of the ownership of the cryptocurrency and from the problems with its prompt convertibility into fiat currency.
Quinn’s statement comes weeks after NatWest’s non-executive director, board member and chairman of the bank’s risk committee, Morten Friis, suggested that the bank would refuse corporate customers to accept virtual currencies as payment.
“We have no appetite for dealing with customers, whether it be assuming them as new customers or having an ongoing relationship with people, whose core business is backed by cryptocurrencies, or cryptocurrency transactions as their primary activity,” said Friis during an online event for shareholders last month.
His comments contrast with Mastercard’s decision to support specific cryptocurrencies if they prove to be stable, secure and in compliance with industry standards and regulations.