HSBC CEO backs CBDCs against crypto and stablecoins

HSBC CEO backs CBDCs against crypto and stablecoins

HSBC, Europe’s largest bank, has $3 trillion in assets. It is skeptical about cryptocurrency, but promotes the development of the central bank digital currency (CBDC).

Noel Quinn, CEO of HSBC Group, wrote an article entitled New forms of digital currency could spur growth. It outlined the firm’s support for CBDC, which provides transparent legal tender that can avoid the “many risks” associated to cryptocurrencies and stablecoins.

The Sept. 21 article argues that global CBDC efforts such as the Chinese digital Yuan are the “new type of digital money,” while private currency, including stablecoins, is “nothing new.” Current commercial bank money can be privately created and widely used. Quinn explained that commercial bank money is anchored in central bank money and tightly regulated to reflect its systemic importance.

According to the CEO, stablecoins will need regulation to meet the risks associated with the increased adoption of cryptocurrencies and stablecoins. He said that only designs that can be anchored sufficiently to ensure price stability and conform with current approaches to financial crime prevention are likely to be reliable and secure means of payment.

Quinn expressed skepticism about crypto but HSBC will continue to deepen its experience in cross-border payments as well as the global CBDC development. He pointed out that the bank has been working closely with central banks in many countries, including the United Kingdom, France and Canada, Hong Kong, Thailand, Thailand, Singapore, Hong Kong, Thailand, and the United Arab Emirates to support their CBDC projects.

HSBC, alongside BlackRock, is one of the most important banking institutions in the world. It is reputed to be one of the biggest debt buyers for Evergrande, a Chinese real estate developer. HSBC is a major skeptic of Bitcoin (BTC), and the entire crypto industry, in contrast to BlackRock which has been active in crypto lately.

Related: President of the ECB says stablecoins are assets, not currencies

HSBC was one of the British banks to choose to stop using Binance payment channels in August due to “concerns over possible risks” to customers. HSBC had previously banned customers from interacting crypto-related stocks by MicroStrategy, a business intelligence firm.

Quinn’s comments come amid growing scrutiny by global financial regulators over private stablecoins. The chair of the United States Securities and Exchange Commission, Gary Gensler, called Tuesday for tougher crypto regulation. He called stablecoins “poker chip” at the “Wild West” crypto casino.

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