Saturday, May 21, 2022

HSBC Supports Global CBDC Development

While HSBC remains skeptical regarding crypto trading, the largest European bank prompts the development of the Central Bank Digital Currency (CBDC) in the region.  

Noel Quinn, the CEO of HSBC Group, penned an article titled ‘New Forms Of Digital Money Could Spur Growth.’ The article describes the European bank’s commitment to supporting the CBDC concept because it offers a transparent legal tender design which helps in avoiding the risks integrated with cryptocurrencies and stablecoins.

According to the article, released on September 21, CBDCs like China’s digital yuan are the “new form of digital money” but private currencies like stablecoins “are nothing new.”

Quinn, in his article, mentioned, “Current commercial bank money is privately created and widely used. But commercial bank money is anchored by central bank money and closely regulated, reflecting its systemic importance.”

The CEO of HSBC Group believes that as the adoption of stablecoins and cryptocurrencies grows around the world, the digital assets will require regulation equivalent to theextent of associated risks. 

He further stated, “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 discussing the CBDC development, Quinn also expressed his skepticism over cryptocurrency. He further specified that the HSBC Group will continue supporting the global CBDC development.  

The CEO noted that the largest bank in Europe had been actively working with several central banks to support them in their CBDC  project.

As per the reports, HSBC is one of the largest debt buyers of troubled Chinese real estate developer Evergrande besides investment giant BlackRock.

On one hand, BlackRock is actively moving into cryptos, while on other hand, HSBC has come out as one of the biggest skeptics of Bitcoin and the crypto industry.

A month ago, HSBC banned the payment gateways for Binance over concerns about possible risks to its customers. 

It was reported earlier that HSBC blacklisted the stocks of Microstrategy to restrain its customers from interacting with cryptocurrency.

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