HSBC Launches RedCoin Stablecoin for 3.3 Million PayMe Users

HSBC switched on RedCoin on Friday, a Hong Kong dollar stablecoin that more than 3.3 million PayMe users can activate in the coming days. According to the bank's announcement, users will be able to send the token to friends or pay at more than 100,000 PayMe merchants.

A stablecoin is designed to hold the value of a regular currency, so one RedCoin (ticker RCHKD) should equal one Hong Kong dollar. The practical change is that customers can spend blockchain-based money issued by their own bank without ever opening a crypto exchange account. "This is only the beginning," said John O'Neill, HSBC's managing director of digital assets and currencies, adding that the bank will soon add more products, including wholesale corporate and institutional use cases.

Small start, notable limits

HSBC received its issuer license from the Hong Kong Monetary Authority in April, under a regime that took effect in August 2025. At least 36 companies had been competing for licenses by September of that year. HSBC's reserve tracker showed roughly $10.2 million of RedCoin in circulation shortly after launch, backed by $10.4 million held entirely in cash. That is tiny next to the more than $300 billion stablecoin market dominated by Tether's USDT and Circle's USDC.

There are also restrictions. RedCoin runs on HSBC's own private ledger rather than a public blockchain such as Ethereum, and balances cannot move between PayMe and HSBC's banking app. It is not a bank deposit, so Hong Kong's Deposit Protection Scheme does not cover it.

What comes next

Later this year, HSBC plans to bring the token to its HK Mobile Banking app. Customers there will be able to buy into a tokenized share class of the bank's long-running Hong Kong dollar money market fund, a low-risk fund that holds short-term debt.

Competition is building. In September, 21 lenders including Goldman Sachs and Bank of America announced plans for a joint dollar stablecoin, targeting a launch in the first half of 2027. HSBC says the first independent attestation of RedCoin's reserves, an outside auditor's confirmation that the cash exists, is expected after the fourth quarter of 2026.