HSBC, Hong Kong's largest bank, launched the Hong Kong dollar stablecoin RedCoin inside PayMe on Friday. The bank announced that more than 3.3 million PayMe users will be able to activate wallets in the coming days. Users can transfer RedCoin to friends or make purchases at more than 100,000 PayMe merchants. The launch tests whether a stablecoin issued by a bank can serve everyday payments without requiring users to open a crypto exchange account.
RedCoin trades under the ticker RCHKD and is designed to maintain a value of one Hong Kong dollar per token. HSBC's reserve tracker showed roughly $10.2 million of RedCoin in circulation shortly after launch. The reserve tracker showed backing of $10.4 million, held entirely in cash. HSBC says the first independent attestation of RedCoin's reserves is expected after the fourth quarter of 2026. The attestation would provide an outside auditor's confirmation of the cash reserves.
RedCoin operates on a private ledger owned by HSBC rather than on a public blockchain such as Ethereum. RedCoin balances cannot move between PayMe and HSBC's banking app. RedCoin is not a bank deposit and therefore falls outside Hong Kong's Deposit Protection Scheme, which provides statutory insurance for savings accounts.
HSBC received a stablecoin issuer license from the Hong Kong Monetary Authority in April. The authority serves as Hong Kong's de facto central bank. The licensing framework became effective in August 2025. HSBC secured the license against competition from at least 36 companies that were seeking licenses by September of that year.
HSBC plans to introduce RedCoin in its HK Mobile Banking app later this year. Customers using that app will be able to invest in a tokenized share class of HSBC's established Hong Kong dollar money market fund. The low-risk fund invests cash in short-term debt. Tokenization records ownership through digital tokens on a ledger rather than through a conventional registry. John O'Neill, HSBC's managing director of digital assets and currencies, said HSBC will soon introduce additional products, including uses for wholesale corporate and institutional customers.
Crypto companies have dominated stablecoin issuance until now. Tether's USDT and Circle's USDC lead a market valued at more than $300 billion, with most stablecoin funds held on trading platforms rather than used for everyday purchases. Other banks are also pursuing everyday payments through stablecoins. In September, 21 lenders, including Goldman Sachs and Bank of America, announced plans for a joint dollar stablecoin with a targeted launch during the first half of 2027.