Hong Kong’s Biggest Bank Puts a Stablecoin in 3 Million Wallets

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

“We are excited by the market's interest in HSBC RedCoin. This is only the beginning,” John O'Neill, HSBC's managing director of digital assets and currencies, said. “We will soon add more products, including expanding into wholesale corporate and institutional use cases.”

A stablecoin is a crypto token designed to always be worth one unit of a regular currency, so one RedCoin (ticker RCHKD) should equal one Hong Kong dollar. In practice, someone in Hong Kong can now pay for lunch with blockchain-based money issued by the same bank that may already hold their salary, without ever opening a crypto exchange.

Until now, stablecoins have mostly been a crypto-company business. Tether's USDT and Circle's USDC dominate a market worth more than $300 billion, and most of that money lives on trading platforms, not at the corner noodle shop.

HSBC got its issuer license from the Hong Kong Monetary Authority, the city's de facto central bank, in April, under a regime that took effect in August 2025. It beat a crowded field of at least 36 companies competing by September of that year.

HSBC's reserve tracker showed roughly $10.2 million in RedCoin circulating shortly after launch—pocket change next to USDT—backed by $10.4 million held entirely in cash.

RedCoin also runs on HSBC's own private ledger rather than a public blockchain like Ethereum, and balances can't even move between PayMe and HSBC's banking app. It isn't a bank deposit either, so Hong Kong's Deposit Protection Scheme, the statutory insurance on savings accounts, doesn't cover it.

Later this year, HSBC plans to bring the token to its HK Mobile Banking app, where customers will be able to buy into a tokenized share class of its long-running Hong Kong dollar money market fund (a low-risk fund that parks cash in short-term debt). Tokenized simply means ownership is recorded as a digital token on a ledger instead of in a traditional registry.

Other banks want the same slice of everyday payments. 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 report confirming the cash is really there, is expected after the fourth quarter of 2026.