Investment bank HSBC has hammered on widespread concerns relating to cryptocurrencies including stablecoins. The second-largest European bank with assets under management valued at almost $3 trillion also added its voice to the growing calls for regulations, stating that they need to match the adoption pace of digital currencies.
However, the banking behemoth has thrown its whole weight behind central bank digital currencies, which have also been receiving widespread attention from central banks in different countries.
In an article entitled New forms of money could spur growth, HSBC Holdings’ CEO Noel Quinn affirmed the bank’s support for government-backed digital currencies while citing their advantages. Quinn identified one as providing an open legal tender created to evade or prevent negative implications that crypto or stablecoins are characterized with.
HSBC’s CEO Says Nothing New About Crypto and Stablecoins
CEO Quinn’s article was published on Monday. In his article, the CEO maintained that dominant CBDC attempts such as China’s e-CNY or digital Yuan or India’s e-Rupee are the new modes of digital money while privately issued money or even stablecoins are nothing new.’
In his article, Noel Quinn compared privately issued commercial bank money and those printed by central banks. Citing their differences, he noted that the former is open for public usage after being created privately; while the latter is backed by central banks and regulated, strengthening its relevance.
The HSBC CEO argued against stablecoins and privately issued digital currencies saying that they would need regulations that match the degree of risks they are known for. Additionally, Quinn said that it is only those crypto assets that have been carefully designed to beat volatility and pass anti-money laundering tests that would potentially suffice as reliable and safe payment means.
HSBC Pledges to Intensify Efforts on CBDCS
While stating his reservations about cryptocurrencies, CEO Quinn pledged that the European bank will continue to consolidate its efforts on transborder payments and widespread CBDC development. He revealed that the banking giant partnered with several apex banks on their CBDC projects. Some of these banks are in countries like the US, Canada, Singapore, the UK, Hong Kong, China.
HSBC is now reckoned as one of the biggest critics of flagship cryptocurrency, Bitcoin and the entire crypto sector. Back in August, the bank took a major step in expressing its hostility for cryptocurrencies- it was among some of the British banks that choose to deactivate payments gateways connecting their clients to leading crypto exchange Binance. HSBC had cited concerns over potential risks as prompting its action. Earlier, the European bank had prevented clients from trading the stocks of Software giant, MicroStrategy.
Quinn’s comments come on the heels of the growing concerns over the risks on private stablecoins as expressed by regulators around the globe. On Sept. 21, US SEC Chairman Gary Gensler reiterated the need for stricter regulations in stronger terms.