HSBC launched RedCoin, a Hong Kong dollar stablecoin licensed by the Hong Kong Monetary Authority, on its PayMe app on Friday. More than 3.3 million PayMe users will be able to activate wallets in the coming days to send RedCoin to friends or pay at more than 100,000 merchants.
RedCoin, which uses the ticker RCHKD, is designed to maintain a value equal to one Hong Kong dollar. The stablecoin operates on HSBC's private ledger rather than a public blockchain, and balances cannot move between the PayMe app and HSBC's banking application.
Shortly after launch, approximately $10.2 million in RedCoin was in circulation, fully backed by $10.4 million held in cash reserves. However, RedCoin is not classified as a bank deposit and is not covered by Hong Kong's Deposit Protection Scheme.
HSBC obtained its issuer license from the Hong Kong Monetary Authority in April under a regulatory regime that took effect in August 2025. The bank competed against at least 36 other companies for the license by September of that year.
Planned Expansion
HSBC plans to add RedCoin to its HK Mobile Banking app later this year. The bank also intends to introduce a tokenized share class of its Hong Kong dollar money market fund, allowing customers to purchase stakes in the fund with digital tokens recorded on a ledger.
The first independent attestation of RedCoin's reserves by an outside auditor is expected after the fourth quarter of 2026.
Broader Market Context
Until now, stablecoins have primarily been issued by cryptocurrency companies. Tether's USDT and Circle's USDC currently dominate the stablecoin market, which is valued at more than $300 billion. In September, a consortium of 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.
