HSBC CEO says Bitcoin not for us

HSBC has no plans to launch a cryptocurrency trading desk or offer the digital coins as an investment to customers, because they are too volatile and lack transparency, its Chief Executive Noel Quinn told Reuters.

Europe's biggest bank's stance on cryptocurrencies comes as the world's biggest and best-known, Bitcoin, has tumbled nearly 50% from the year's high, after China cracked down on mining the currency and prominent advocate Elon Musk tempered his support.

HSBC's stance also contrasts with rival banks such as Goldman Sachs, which Reuters in March reported had restarted its cryptocurrency trading desk.


"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 said.

"For similar reasons we're not rushing into stablecoins," he said, referring to the digital currencies that seek to avoid the volatility associated with typical cryptocurrencies by pegging their value to assets such as the U.S. dollar.

Bitcoin traded at $34,464 on Monday, down nearly 50% in just 40 days from its year high of $64,895 on April 14.

Pressure on the currency intensified after the billionaire Tesla Chief Executive and cryptocurrency backer Musk reversed his stance on Tesla accepting Bitcoin as payment.

'Difficult questions'
China, which is central to HSBC's growth strategy, said last Tuesday that it had banned financial institutions and payment companies from providing services related to cryptocurrency transactions.

Reuters reported in April that HSBC had banned customers in its online share trading platform from buying shares in bitcoin-backed MicroStrategy, saying in a message to clients that it would not facilitate the buying or exchange of products related to virtual currencies.

Quinn said his sceptical stance on cryptocurrencies partly arose from the difficulty of assessing the transparency of who owns them, as well as problems with their ready convertibility into fiat money.

"I view Bitcoin as more of an asset class than a payments vehicle, with very difficult questions about how to value it on the balance sheet of clients because it is so volatile," he said.

"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."

The soaring popularity of cryptocurrencies has posed a problem for mainstream banks in recent years, as they try to balance catering to clients' interest with their own regulatory obligations to understand the source of their customers' wealth.

HSBC's stance against offering cryptocurrencies as an asset class marks it out against European rivals such as UBS, which is exploring ways to offering them as an investment product according to media reports earlier this month.