Noel Quinn, CEO of HSBC, which manages $ 3 trillion in assets, called the digital currencies of the Central Bank “a new form of money.”
Quinn published an article in which he stated that government stablecoins can be considered legal tender as they are backed by central banks and governments. This proves their transparency and stability, and also avoids many of the risks inherent in private stablecoins and public cryptocurrencies, says Quinn.
He sees many benefits in government digital currencies. First of all, they can contribute to the economic development of countries, increasing the efficiency of payments and settlements, as well as reducing their cost. Central bank digital currencies could improve countries’ tax and monetary policies, Quinn said. This will further stimulate the demand for government cryptocurrencies.
The HSBC CEO also noted the potential risks that central banks need to prevent when launching their own digital currencies. Central banks must ensure that their new products and services are truly safe and innovative. For example, governments should consider the impact of these products on loan supply, market activity and financial stability. In addition, digital currencies issued by central banks are required to ensure user privacy and be resilient to cyber attacks.
According to Quinn, government stablecoins should function on the basis of a two-tier model, in which commercial banks also participate. This will save central banks from the need to create new infrastructure for managing accounts, while commercial banks will remain an important link in the financial sector.
Quinn said that as one of the largest financial institutions with extensive experience in international payments, HSBC will continue to explore the potential of government digital currencies. The bank is collaborating on this issue with the central banks of the UK, France, Canada, Singapore, China, Hong Kong, Thailand and the UAE, as they are actively exploring the possibility of issuing their own digital currency.
About cryptocurrencies, the head of HSBC said that private money is nothing new. Earlier, Quinn said that he does not consider bitcoin an asset class due to its instability, so the bank does not plan to offer clients investments in cryptocurrencies.
