HSBC CEO endorses CBDC against cryptocurrencies and stablecoins
HSBC, the largest European bank with $ 3 trillion in assets, maintains a skeptical stance on cryptocurrencies while promoting the development of central bank digital currencies (CBDCs).
Noel Quinn, CEO of HSBC Group, wrote an article: New forms of digital currency can fuel growth, outlines the company’s commitment to support the CBDC concept as it provides transparent legal tender to avoid the “many risks” associated with cryptocurrencies and stablecoins.
The paper, released Sept. 21, argues that global CBDC efforts like China’s digital yuan are “a new form of digital currency,” while the very core of private money itself, including stablecoins, is “nothing new.” “Today, commercial bank money is created privately and used extensively. But commercial bank money is anchored and tightly regulated by central bank money, reflecting its systemic importance, ”Quinn wrote.
The CEO went on to say that stablecoins and cryptocurrencies will require regulation commensurate with the level of risk associated with advancing industry adoption. “Even then, only designs that are anchored in a stable price and correspond to current approaches to financial crime prevention can become a reliable and secure means of payment.
Quinn expressed skepticism about cryptocurrencies, but stressed that HSBC will continue to deepen its experience in cross-border payments and global CBDC development. He noted that the bank has been actively working with many central banks, including in the UK, France, Canada, Singapore, mainland China, Hong Kong, Thailand and the United Arab Emirates Unit, to contribute to its CBDC projects.
HSBC, one of the largest banking institutions in the world, is reportedly one of the biggest debt buyers from ailing Chinese real estate developer Evergrande, along with investment giant BlackRock. Unlike BlackRock, which has been actively turning to cryptocurrency lately, HSBC has emerged as one of the biggest skeptics about Bitcoin (BTC) and the crypto industry as a whole.
Related: ECB president says stablecoins are assets – not currencies
In August, HSBC was among the UK banks that decided to cut the Binance payment channel because of “concerns about potential risks” for their customers. HSBC previously listed shares in business intelligence company MicroStrategy as part of a user policy banning customers from interacting with cryptocurrencies.
Quinn’s comments come amid increasing scrutiny of private stablecoins by global financial regulators. On Tuesday, the chairman of the US Securities and Exchange Commission, Gary Gensler, again called for stricter crypto regulation and called stablecoins “chip poker” in the crypto casino “Wild West”.