HSBC CEO: 'We are not into Bitcoin as an asset class'

Quick Take

  • HSBC CEO Noel Quinn has said that the bank has no plans to offer crypto services.
  • Crypto is too volatile and lacks transparency, according to Quinn. 

HSBC CEO Noel Quinn has said that the banking giant has no plans to launch a cryptocurrency trading desk or offer it as an investment vehicle to its clients. That is because crypto is too volatile and lacks transparency, he said.

"Given the volatility, we are not into Bitcoin as an asset class. If our clients want to be there then of course they are, but we are not promoting it as an asset class within our wealth management business," Quinn told Reuters in an interview published Monday.

As for crypto's transparency issues, Quinn said it is difficult to know who owns crypto, and there are also issues with crypto's easy conversion into fiat money.

Quinn is also not optimistic about stablecoins because of their problems with reserves backing and accessibility. "Then you get to stablecoins, which do have some reserve backing behind them to address the stored value concerns, but it depends on who the sponsoring organisation is plus the structure and accessibility of the reserve," he said.

Steering clear of volatility

Quinn's comments come amid the crypto market's latest rout. Bitcoin has lost almost 50% of its value in over a month, from about $65,000 in mid-April to about $36,500 at the time of writing. China's comments to do with "cracking down on bitcoin mining and trading activities" on late Friday resulted in mayhem over the weekend.

As for HSBC, it is known for its pessimistic view of crypto. The bank's online share-dealing service HSBC InvestDirect recently banned customers from buying MicroStrategy shares because "HSBC has no appetite for direct exposure to virtual currencies [VCs] and limited appetite to facilitate products or securities that derive their value from VCs."

HSBC rivals such as Citi, Goldman Sachs, and UBS, on the other hand, have all warmed up to the crypto market recently. Goldman Sachs restarted its crypto trading desk earlier this year. Citi and UBS are also considering launching crypto services for their clients. Morgan StanleyBank of New York Mellon, and others have also moved to provide crypto services to their wealthy clients.

JPMorgan Private Bank recently told its clients in an educational deck that bitcoin can be a portfolio diversifier "if sized correctly."

© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.