Crypto is not part of every bank’s future strategy.
HSBC, one of the largest multinational banks in the world, claims that it is not too confident about crypto and therefore will not offer any services related to it in the future.
Noel Quinn, CEO of HSBC, says:
“I worry about the sustainability of crypto valuations and have for a while. I’m not going to predict where this will go in the future.
In a recent interview with CNBC-TV18, Quinn confirmed that they will not enter the crypto space like exchanges or commerce, not now or ever as they believe it is not too clearly defined and tested in terms of stability and suitability for many consumers today.
HSBC is not a fan of Bitcoin
In May 2021, Quinn revealed to Reuters his view of Bitcoin as unsuitable for payments because it is difficult to quantify on a balance sheet judging by its high volatility. On the other hand, Quinn generally views it as an asset class.
He also says that due to the volatile nature of Bitcoin, they refuse to support or promote it as an asset class.
For the same reasons, HSBC is also cautious about getting into stablecoins. Although stablecoins have some stored value or are backed by the US dollar, it will always depend on the accessibility, structure and organization behind it.
In April 2021, some changes were implemented to HSBC Canada’s Digital Asset Policy, including the suspension of transactions for selling or exchanging crypto-related products.
No security and stability?
Quinn has a rather pessimistic view of digital assets and how they will fit into today’s market or customer base.
Apart from the high volatility of cryptocurrencies, the rise of cyberattacks related to the crypto space has also caused many financial institutions to lose faith and trust in Bitcoin and others.
In fact, over 56% of cyberattacks were targeted at crypto and were able to hack around $1 billion. Lazarus, a notorious hacking group, was able to steal around $540 million in digital assets from Ronin Bridge and other DeFi platforms. With this in mind, HSBC does not consider it an asset class.
No to Bitcoin, yes to the Metaverse
Meanwhile, as the Metaverse’s popularity grows, several companies, including HSBC and JPMorgan Chase, are establishing virtual presences.
HSBC bought land in the metaverse from The Sandbox last March, the first global financial institution to do so.
JPMorgan Chase was the first major bank to establish an Onyx lounge in Decentraland, where users could purchase property using cryptocurrency, a month earlier.
Crypto total market cap at $926 billion on the daily chart | Source: TradingView.com Featured image from SuperCryptoNews, Chart: TradingView.com