UK bank HSBC revealed in an insight article that they are working in collaboration with a number of central banks on the discussion and development of central bank digital currencies (CBDCs)
The chief executive of HSBC, Noel Quinn, shared the bank's views on CBDCs, the form of centralised digital currency backed by a central bank. Quinn revealed that the commercial bank has been in discussions with several central banks, including the UK, France, and China.
“As one of the worlds largest financial institutions, with deep experience of cross-border payments and foreign exchange markets, HSBC will continue to be involved in discussing and developing CBDCs. We are already working in partnership with many central banks, including those in the UK, France, Canada, Singapore, mainland China, Hong Kong, Thailand and the UAE, as they each consider how CBDCs can best work for them.”
The insight article provided insight into the operations of a major UK bank, with HSBCs CEO providing an optimistic view of CBDCs, noting that CBDCs could help spur further economic growth as well as fueling innovation across the financial sector.
As well as the positive of digital currency, the potential risks of these were also outline, with Quinn noting:
“We must ensure that new products and services are safe, efficient, and genuinely transformative. For example, central banks and public authorities will need to consider the impact CBDCs could have on the supply of credit, market activity and financial stability. They will need to meet customer expectations for data privacy and protection, while enabling the mitigation of financial crime risks and withstanding cyber-attacks”
Cryptocurrency-related cyber attacks have increased in volume in alignment with the interest in cryptocurrency. And while global adoption is on the rise, the online, untraceable nature of cryptocurrency makes it the perfect currency for scammers and cyber attackers to request.
HSBC outlined how one of the requirements of CBDCs is that they meet the “high standards of safety and efficiency that banks always look for from new products and services”, and if they are able to do so, then the bank believes they can bring about positive change for the financial sector and the real economy.
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