Banks have an on-off relationship with the cryptocurrency world. The fact that Barclay recently tied-up with Coinbase in May proves the potential of banks and cryptocurrency collaborations. On the other hand, HSBC has stated to have a “Cautious” approach to the same as per Forbes.
According to Forbes, Josh Bottomley, the Global Head of Digital at HSBC said, “We are cautious looking into this area” when he was asked about the bank’s approach towards cryptocurrencies.
Josh told Forbes:
“There’s a use case when you have a token or currency that’s actually useful for a particular purpose, and it serves that need.”
Bottomley, however, was keen to stress that this interest does not extend at the moment to invest in leading cryptocurrencies such as Bitcoin [BTC] and Ethereum [ETH]. 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.”
The Global Head of Digital also explained their criteria for using different assets and said:
“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.”
The spokesperson further stated that the company [HSBC] does not trade cryptocurrencies nor do they process payments denominated in cryptocurrencies.
The power of cryptocurrency in this current era is growing as banks are adopting and adapting towards blockchain technology and cryptocurrencies. As observed, the worlds 5 largest banks are indulged with the world of blockchain. They are:
- Industrial and Commercial Bank of China [ICBC]
- China Construction Bank [CCB]
- JPMorgan Chase
- Berkshire Hathaway
- Agricultural Bank of China [ABC]
Earlier in May, HSBC claimed that it had performed the world’s first commercially viable trade finance transaction using blockchain technology.
The bank issued a letter of credit for U.S. food and agriculture firm Cargill. The trade finance transaction involved a bulk shipment of soybeans from Argentina to Malaysia. The letter of credit was issued from HSBC to Dutch lender ING.
Letters of credit are issued by one bank to another to ensure that an installment is received by a merchant under an arrangement of conditions.
Generally, this procedure would take a lot of time, various paper records, and a considerable measure of up and down between the different gatherings. This entire hassle was eradicated as blockchain innovation changed it.
While speaking of cryptocurrencies, Josh Bottomley as the spokesperson of HSBC said:
“We don’t broadly believe that’s the case now, but it might change.”
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