HSBC CEO Backs CBDCs Against Crypto And Stablecoins
HSBC, Europe’s largest bank with total assets of $3 trillion, has taken a skeptical stance on cryptocurrency whale promoting the CBDC (central bank digital currency) development. A recent article, penned by HSBC CEO Noel Guinn, New forms of digital money could spur growth, outlines the firm’s commitment to supporting the growth of CBDCs as it provides transparent legal tender that is designed to avoid “many risks” associated with cryptocurrencies and stablecoins.
The article argues that global CBDC efforts, like the Chinese digital Yuan, are the “new form of digital money.” According to the piece by Quinn, private money, including forms of stablecoins, “is nothing new”.
“Commercial bank money is currently privately created and widely used; however, it is tied to central bank money and is closely regulated, reflecting its systematic importance,” Quinn said.
In the article, Quinn went on to share his opinion that stablecoins and cryptocurrencies will require regulation that is equivalent to the extent of associated risks as the industry adoption grows further. Quinn added, “Even then, only designs that are sufficiently well anchored to achieve price stability, and correspond with current approaches to financial crime prevention, are likely to be useful as a reliable and safe means of payment.”
While expressing his skepticism for crypto, Quinn emphasised that HSBC will continue to develop the experience of cross-border payments and backing the global CBDC development. HSBC has been working with a number of central banks around the globe, including those in the UK, France, Canada, China, Hong Kong, Thailand, Singapore, and The United Arab Emirates, to contribute to their CBDC projects.
HSBC is among the world’s largest financial institutions and is currently one of the largest debt buyers of troubled Chinese real estate developer Evergrande (alongside investment giant BlackRock.) Despite the firm’s involvement in crypto-related industries, HSBC has remained to be one of the biggest skeptics of Bitcoin and the crypto industry.
Back in August 2021, HSBC was one of the British banks that decided to cut Binance payment channels over concerns about possible risks.
Quinns remarks have come amid growing scrutiny over private stablecoins by global financial regulators. On Tuesday, U.S SEC chair Gary Gensler called once again for tougher crypto regulation.