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Updated May 26th, 2021 at 17:20 IST

Bitcoin: HSBC not buying in; CEO reveals reason why bank won't launch crypto trading desk

British multinational investment bank HSBC's CEO Noel Quinn is not buying into the Bitcoin craze. He has cited volatility as a reason for the disinterest

Reported by: Aanchal Nigam
Bitcoin
IMAGE: PTI/Unsplash | Image:self
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While the world following the rise and fall and continued meanderings of cryptocurrencies with bated breaths, and with several financial institutions also introducing exchanges in crypto, British multinational investment bank HSBC's CEO Noel Quinn is not buying into the Bitcoin craze. CNN confirmed Quinn’s remarks to another media outlet last week when he said that the bank has no plans to launch a cryptocurrency trading desk citing its “volatility.” HSBC CEO said they are “not into Bitcoin as an asset class.” Bitcoin (XBT) is currently on an unpredictable ride with the cryptocurrency showing wild price swings. However, in this month alone, Bitcoin’s value has dropped more than 30% from $58,000 to just over $39,000 per coin, according to cryptocurrency tracker CoinDesk.

Bitcoin, as per the report, is still up more than 30% so far this year. Reportedly, one of the major driving forces in cryptocurrency’s unpredictability has been Tesla CEO Elon Musk. His cryptic tweets, or remarks, are known to often stir among the investors after sharing his personal opinions regarding several digital currencies. In March, Morgan Stanley became the first prominent bank in the United States to give wealthy clients access to virtual currency investments and this was followed by Goldman Sachs in April.

After JPMorgan (JPM) CEO Jamie Dimon dismissed bitcoin as a "fraud” in 2019, his bank launched its own digital coin. Meanwhile, Mathew McDermott, global head of digital assets at Goldman Sachs, reportedly discussed the decision to jump into the digital currency industry citing greater “client demand, pure and simple.” He said, “Bitcoin is now considered an investable asset...There's no doubt that 'fear of missing out' (FOMO) is playing a role."

China bans cryptocurrencies in financial exchanges

Citing the same reason as HSBC CEO Noel Quinn, which is cryptocurrencies’ volatility, even China on May 18 announced that country’s financial institutions and payment companies are barred from providing any services related to cryptocurrency transactions and has even warned the investors against speculative crypto trading. It marked another blow to the nascent market reeling from one of its biggest sell-offs ever after booming institutional adoption helped to reach highs during the COVID-19 pandemic. Under the ban, Chinese financial institutions are not allowed from offering clients any service involving cryptocurrencies.

China’s three industry bodies said in a joint statement on Tuesday, “Recently, cryptocurrency prices have skyrocketed and plummeted, and speculative trading of cryptocurrency has rebounded, seriously infringing on the safety of people's property and disrupting the normal economic and financial order. Judging from the current judicial practice in my country, virtual currency transaction contracts are not protected by law." 

Even though China has banned cryptocurrencies from transactions and initial coin offering, the authorities have not barred individuals from holding cryptocurrencies. The financial institutions in the country should not provide either in saying or pledging services of cryptocurrency. They are not allowed to issue any product related to cryptocurrency. 

IMAGE: PTI/Unsplash


 

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Published May 26th, 2021 at 17:20 IST

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