HSBC opts to be on the safe side with cryptocurrency, looks at use cases.
Banks today globally have an on-again, off-again relationship with the world of digital currency. The fact that Barclay recently announced their collaboration with Coinbase in May proves that banks and cryptocurrencies can have a mutually benefiting relationship. On the other hand, Josh Bottomley, the Global Head of Digital at HSBC says that he is staying ‘cautious’ when he is looking into the area of cryptocurrencies, when inquired about HSBC’s approach towards cryptocurrencies, according to Forbes. Josh also told Forbes that he believes there is a use case when you have a token or currency that’s actually useful for a particular purpose, and it serves that need.
He added saying, “But that is very different to if it’s pure speculation…Right now we’re not interested in that at all…but it might change,” indicating that this interest does not extend at the moment for HSBC in leading cryptocurrencies such as Bitcoin and Ethereum.
The Global Head of digital also explained what the bank’s policy enlists as the criteria for using different assets. He was quoted saying,“One of the criteria we use is if an asset class is showing incredible volatility up and down. For the vast majority of our customers, that makes it an inappropriate saving or investment vehicle.” A spokesperson further stated that the company [HSBC] does not currently indulge in cryptocurrency trade and crypto payment processing. The hold of cryptocurrency in this current era is growing as the world’s largest banks continue to adopt blockchain technology and cryptocurrencies.
Five of the world’s leading banks are currently indulged in the world of blockchain., including the Industrial and Commercial Bank of China [ICBC], China Construction Bank [CCB], JPMorgan Chase, Berkshire Hathaway, and the Agricultural Bank of China [ABC]
Earlier in May, HSBC claimed to have performed the world’s first commercially viable trade finance transaction using blockchain technology by issuing a letter of credit for US food and agriculture firm Cargill.
This transaction involved a bulk shipment of soybeans from Argentina to Malaysia. If carried out the traditional way, this procedure would have taken a tedious amount of time, paperwork and considerable dawdling between the two parties but the entire hassle was evaded as blockchain innovation revolutionised it.
Talking about the bank’s approach to cryptocurrencies Josh Bottomley said that they don’t necessarily believe that’s the case as of now, but it can surely change in the future.