Cryptography is not part of every bank’s future strategy.
HSBC, one of the largest multinational banks in the world, says that they do not trust crypto too much and therefore will not offer any services related to it in the future.
HSBC CEO Noel Quinn says:
“I am concerned about the sustainability of crypto valuations and have been for some time. I am not going to predict where it will go in the future.”
In a recent interview with CNBC-TV18, Quinn confirmed that they will not enter the crypto space such as exchanges or trading, not now or ever, as they believe it is not too clearly defined and tested in terms of stability and suitability for to many consumers today.
HSBC is not a fan of Bitcoin
In May 2021, Quinn revealed to Reuters his outlook on 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 sees 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 wary of jumping into stablecoins. Even if stablecoins have some stored value or are backed by the US dollar, it will still depend on the accessibility, structure and organization backing them.
In April 2021, some changes were implemented to HSBC Canada’s digital asset policy which included the suspension of sales or exchange transactions of crypto-related products.
Without security and stability?
Quinn has a rather pessimistic view on digital assets and how they will fit into today’s market or consumer base.
Apart from the high volatility of cryptocurrencies, the rise in cyber attacks related to the crypto space has also caused many financial institutions to lose faith and trust in Bitcoin and the like.
In fact, more than 56% of cyberattacks have targeted cryptography and have been able to hack approximately $1 billion. Lazarus, a notorious hacking group, was able to steal around $540 million in digital assets from Ronin Bridge and other DeFi platforms. In this sense, HSBC does not consider it as an asset class.
No to Bitcoin, yes to the metaverse
Meanwhile, as the metaverse grows in popularity, several companies, including HSBC and JPMorgan Chase, are establishing virtual presences.
Last March, HSBC bought land inside The Sandbox metaverse, the first global financial institution to do so.
JPMorgan Chase was the first of the big banks to set up an Onyx lounge in Decentraland, where users could buy 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