Banks and cryptocurrencies have not always been the best of friends, though the former is beginning to loosen up a bit. In the latest development, HSBC’s Global Head of Digital said on July 19, 2018, that the finance heavyweight is taking a ‘”cautious” approach towards cryptocurrencies due to the super volatile nature of digital assets.
Tokenization better than Speculation
In an interview with Forbes, the former Managing Director of LexisNexis who is now in charge of HSBC’s digital strategy for both retail and asset management departments reiterated that the bank is quite wary of digital currencies like bitcoin because of their unpredictable nature and lack of real use cases.
The erstwhile Global Head of Display at Google pointed out that the proliferation of initial coin offerings into the digital currency industry last year, clearly shows there is a real need for utility tokens created to enhance operations of firms offering digital services,
”There’s a use case when you have a token or currency that’s useful for a particular purpose, and it serves that need. But that is very different to if it’s pure speculation,” Bottomley noted.
HSBC may Offer Clients Bitcoin-linked Services Soon
While an influential figure at the seventh largest bank in the world has made it clear that bitcoin and the altcoins are not in the plans of the firm at current, citing volatility concerns, he has also hinted, however, that the possibility of HSBC joining the bitcoin bandwagon in the near future, can’t be entirely ruled out.
“We don’t broadly believe that’s the case now [crypto integration], but it might change,” said Bottomley.
HSBC may be patiently waiting for the price of bitcoin to stop fluctuating wildly before it adopts the world’s flagship cryptocurrency, but it hasn’t let the distributed ledger technology (DLT) movement leave it behind.
On May 15, 2018, BTCManager informed that HSBC Holdings had completed its first scalable finance transaction powered by DLT, declaring that the groundbreaking technology can now be used extensively in the trade finance industry.
As part of its blockchain integration initiative, the bank is collaborating with Hong Kong’s banking regulator and other big banks including Standard Chartered PLC, to launch a DLT-based trade finance system later in September this year.
With each passing day, the cryptosphere keeps becoming too hard to ignore, effortlessly converting critics into bitcoin evangelists.
On May 19, 2018, reports emerged that JP Morgan Chase had hired London-based Fintech expert, Oliver Harris to create a fail-proof cryptocurrency strategy for the Jamie Dimon-led financial institution.