Banking giant HSBC has barred the customers of its online trading platform, HSBC InvestDirect (HIDC), from purchasing a business intelligence company’s shares, MicroStrategy.
HSBC Clamps Down On Virtual Currency Trading
Having termed Microstrategy shares as virtual currency products, the bank has put a block on clients from purchasing and moving its shares into their InvestDirect accounts.
This is according to a March 29 message sent to customers by HSBC, as reported by Reuters. The bank had sent the letter to customers who hold MicroStrategy shares, informing them of the new policy.
The message noted that HSBC customers will be allowed to hold, sell, and transfer their MicroStrategy shares. However, it will forbid new purchases or incoming transfers.
“HSBC has no appetite for direct exposure to virtual currencies and limited appetite to facilitate products or securities that derive their value from VCs (virtual currencies),” the British investment company stated.
MicroStrategy has become known for its massive Bitcoin purchases over the last few months.
The company started purchasing Bitcoin last year and has since acquired more, making it one of the asset’s leading institutional investors. It currently holds $5.4 billion worth of crypto.
Recently, Microstrategy’s founder and CEO, Michael Saylor, announced that the firm would soon start paying non-employee board members with Bitcoin instead of cash.
— Michael Saylor (@michael_saylor) April 12, 2021
He stated that the change signifies the firm’s commitment to Bitcoin and its ability to serve as a store of value.
HSBC Tough Stance On Crypto Amid Current Worldwide Embrace
This move by HSBC comes after it blocked its customers from depositing from crypto wallets earlier this year, as published by The Times.
Although the bank did not disclose which countries the ban applied to, its aggressive policy towards cryptocurrencies has been in place since 2018 and is kept under review.
HSBC’s ban that limits clients from buying stocks from companies with crypto holdings comes when several companies are beginning to embrace cryptocurrencies.
Major companies like Goldman Sachs, Bank of New York Mellon, Tesla, PayPal, and Visa have either purchased Bitcoin or started facilitating payments with crypto.
Last month, the incoming new global head of digital assets for Goldman Sach’s private wealth management division Mary Rich, said in an interview with CNBC that Goldman would offer Bitcoin investments and other digital assets to its high-value clients.
Morgan Stanley has also started offering clients investments in the emerging asset class.
JPMorgan Chase also revealed plans to launch Cryptocurrency Exposure Basket – a debt instrument with positions in 11 companies. The debt instrument reportedly allocates 20% to MicroStrategy and 18% to Jack Dorsey-led Square Inc, the two companies that declared their Bitcoin investments early on.