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Tuesday, March 5, 2024

Impact of cryptocurrencies growth on the world economy

Noel Quinn, chief executive officer of HSBC bank, which manages $ 3 trillion in assets, called central bank digital currencies a “new form of money.”

“Quinn published an article in which he said that public stablecoins can be considered a legal means of payment because they are backed by central banks and governments. This proves their transparency and stability, while avoiding many of the risks inherent in private stablecoins and public cryptocurrencies, Quinn believes.

He sees many advantages in public digital currencies. First, they can contribute to the economic development of countries by improving the efficiency of payments and settlements and reducing their cost.

“Central bank digital currencies could improve countries’ fiscal and monetary policies. This will further stimulate demand for public cryptocurrencies,” Quinn said.

The HSBC CEO also highlighted the potential risks central banks should avoid when launching their own digital currencies. Central banks need to ensure that their new products and services are genuinely secure and innovative. For example, public authorities must take into account the impact of these products on the supply of credit, market activity and financial stability. In addition, digital currencies issued by central banks are required to ensure user privacy and resist cyber attacks.

According to Quinn, public stablecoins should operate on the basis of a two-tier model in which commercial banks participate. This will prevent central banks from building a new account management infrastructure, with commercial banks remaining 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 public digital currencies. The bank is cooperating on this matter with the central banks of the United Kingdom, France, Canada, Singapore, China, Hong Kong, Thailand and the United Arab Emirates, as they are actively exploring the possibility of issue their own digital currency.

On cryptocurrency, the HSBC executive said there was nothing new about private money. Previously, Quinn had said that he did not view Bitcoin as a class asset due to its instability, so the bank did not consider offering its clients investments in cryptocurrencies.

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