HSBC has started rolling out RedCoin, a stablecoin designed to be worth one Hong Kong dollar per token, to the more than 3.3 million users of its PayMe payments app, the bank said on Oct. 23. Six days later, its public reserve tracker showed HK$83.2 million of the coins in circulation.

The rollout tests whether a bank-issued, regulated coin can find everyday use in a market built around crypto trading. Dollar tokens from Tether and Circle dominate a stablecoin market worth more than US$300 billion, most of it held on trading platforms, according to Decrypt. For banks, brokers and asset managers in the city, RedCoin's take-up is an early gauge of demand for Hong Kong dollar tokens and for the tokenized funds HSBC plans to sell with them.

HSBC is switching the service on in stages, the South China Morning Post reported. PayMe users can activate a stablecoin wallet inside the app over the coming days and use it to send money to other people or to pay at more than 100,000 merchants, HSBC said. Before launch, the bank ran staff pilots with nearly 100 users that tested the full process, from minting coins to live transfers.

How HSBC's RedCoin works

RedCoin carries the ticker RCHKD and is issued under license number FRS02 from the Hong Kong Monetary Authority, which granted the license in April. The HKMA's public register shows it took effect on April 10, 2026.

The coin can be redeemed one-for-one for Hong Kong dollars. HSBC's white paper says redemptions are processed instantly and in any case within one business day, and the bank charges nothing to buy or redeem coins or to use them for payments, though it can change that with notice. RedCoin pays no interest and is not covered by Hong Kong's Deposit Protection Scheme.

The reserves sit in a trust, with HSBC Institutional Trust Services (Asia) as trustee and holders as beneficial owners, according to the white paper. HSBC keeps any income earned on those assets and bears any losses. If the bank became insolvent, holders could direct the sale of the reserve pool to redeem their coins pro rata. As of Oct. 29, the tracker showed HK$84.2 million of reserve assets, all in cash, against coins in circulation that had risen by HK$2.6 million over the previous seven days.

The system is closed. RedCoin runs on a private, permissioned blockchain built on Ethereum-compatible technology, with every validator node owned and run by the bank, the white paper says. Connecting it to public blockchains would need HKMA approval. Every holder must be an HSBC customer who has passed due diligence through PayMe or the HSBC HK app, and coins cannot move between the PayMe wallet and the planned wallet in the banking app.

Maggie Ng, HSBC's chief executive for Hong Kong, said money and assets are moving onto always-on, programmable digital networks, and that the bank wants to help customers make that shift. “This is only the beginning,” said John O'Neill, HSBC's managing director for digital assets and currencies, adding that wholesale corporate and institutional uses would follow.

HSBC and Anchorpoint take different routes

Hong Kong's Stablecoins Ordinance took effect in August 2025 and requires stablecoin issuers to hold an HKMA license. The regulator received 36 applications, The Block reported. Its register lists two licensees, both effective April 10: HSBC and Anchorpoint Financial, which holds license FRS01. The register was last revised on April 23.

Anchorpoint, a subsidiary of Standard Chartered set up as a joint venture with HKT and Animoca Brands, began a phased rollout of its HKDAP token on Aug. 12, according to The Block. Access was limited to institutional distributors and professional investors, and the first uses were cross-border payments and settling tokenized real-world assets. A test with OSL Group in May moved HKDAP on the public Ethereum network, the outlet reported, and HashKey Exchange has joined as a distributor.

The two licensees have therefore started at opposite ends of the market: Anchorpoint with institutions and public-chain transfers, HSBC with retail payments inside its own apps. Banks elsewhere are moving too. In September, 21 lenders including Goldman Sachs and Bank of America announced plans for a jointly issued US dollar stablecoin targeting a launch in the first half of 2027, Decrypt reported.

HSBC's own customer research points to the questions RedCoin has to answer. In a June survey of 1,060 customers, respondents ranked fraud protection, easy conversion to cash and reserve transparency among the things that would raise their confidence in stablecoins, the bank said when it named the coin on Sept. 30. In the same survey, 53% said Hong Kong dollar stablecoins could strengthen the city's economic competitiveness, HSBC said at launch.

What comes next for HSBC

Before the end of the year, HSBC intends to bring RedCoin wallets to its main HSBC HK Mobile Banking app, where customers will be able to buy tokenized investment products with the coin. One will be a new share class of the bank's long-running Hong Kong dollar money market fund.

The bank already runs other tokenized products in the city. Its Gold Token for retail customers had recorded 390,000 trades worth a combined US$2.5 billion by the end of August, and its Orion platform has handled more than US$8.3 billion of digitally native bond issuance globally since 2023, HSBC said.

The next marker for holders is outside verification. HSBC said the first independent auditor's attestation of RedCoin's reserves is expected to be published after the fourth quarter of 2026.