Newsletter
- HSBC has launched RedCoin within its PayMe application, which is a Hong Kong dollar stablecoin permitted by the Hong Kong Monetary Authority. Over 3.3 million users will be able to activate their wallets in the coming days.
- Users can send RedCoin to friends, or make payments at over 100,000 PayMe merchants.
- HSBC plans to add this token to its Hong Kong mobile banking app later this year.
Banking giant HSBC launched RedCoin on Friday. According to a statement from the bank, this is a Hong Kong dollar-stabilized cryptocurrency. Over 3.3 million PayMe users will be able to activate their wallets in the coming days to make payments to friends or shop at more than 100,000 merchants.
"We are excited about the market's interest in HSBC's RedCoin, and this is just the beginning," said John O, Managing Director of HSBC's Digital Assets and Currency. "We will soon introduce more products, including expanding to wholesale, corporate, and institutional use cases."
Stablecoins are a type of cryptocurrency designed to always be equivalent to one unit of fiat currency. Therefore, a RedCoin (code: RCHKD) should theoretically be equal to 1 Hong Kong dollar. In practical terms, this means that Hong Kong users can now use blockchain-based currency to pay for lunch, and this currency is issued by the same bank that may already pay their salaries, without the need to open an account with a cryptocurrency exchange.
Prior to this, stablecoins were mostly the business of cryptocurrency companies. The USDT and Circle of Tether dominated a market worth over $300 billion, with most of the funds residing on trading platforms rather than in street-side noodle shops.
In April, HSBC obtained an issuer licence from the Hong Kong Monetary Authority, which is effectively the central bank of the city. This licence applies to a regime that came into effect in August 2025. By September of that year, at least 36 companies were competing, and HSBC stood out among them.
HSBC’s reserve tracking data shows that shortly after RedCoin went live, the amount of RedCoin in circulation was approximately 10.2 million US dollars – a small figure compared to USDT – and it was fully supported by 10.4 million US dollars in cash.
RedCoin operates on HSBC’s own private ledger, rather than a public blockchain like Ethereum; in fact, the balance cannot even be transferred between PayMe and HSBC’s applications. It is not considered a bank deposit either, therefore, Hong Kong’s deposit protection scheme – which is the statutory insurance for savings accounts – does not cover it.
Other banks also hope to get a share of the daily payment market. In September, 21 lending institutions, including Goldman Sachs and Bank of America, announced plans to jointly launch a US dollar-stabilized coin, with the goal of launching it in the first half of 2027.
HSBC stated that the first independent verification of the RedCoin reserve – namely, a report issued by an external auditing firm confirming the actual existence of the relevant cash – is expected to be released after the fourth quarter of 2026.
