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On October 23, 2026, HSBC made RedCoin, its first stablecoin denominated in Hong Kong dollars, available to users of the PayMe application. The service allows for payments at merchants and transfers between private individuals. The bank obtained an issuer license from the Hong Kong Monetary Authority (HKMA) in April 2026, surpassing at least 36 competitors in the selection process. The regulatory regime governing these operations came into effect in August 2025.
Why it matters
The move marks the entry of one of the world’s leading banks into the retail stablecoin market in Hong Kong. RedCoin operates on a private ledger managed by HSBC and not on public blockchains like Ethereum. This approach limits the transferability of balances: funds cannot be moved directly from the PayMe app to HSBC’s traditional banking app. Furthermore, RedCoin is not classified as a bank deposit and therefore does not fall under the coverage of the local Deposit Protection Scheme. The technical structure chosen by the bank implies centralized control over transaction accounting.
The numbers
Sources report slightly different data on the audience reached: CoinDesk indicates distribution to 3 million users of the everyday app, while Decrypt specifies that 3.3 million PayMe users can activate the service. Approximately 100,000 merchants already accept payments with RedCoin. Shortly after launch, approximately 10.2 million US dollars equivalent in RedCoin were in circulation, backed by cash reserves equal to 10.4 million US dollars. For comparison, the total value of the stablecoin market, dominated by USDT and USDC, is estimated at 300 billion US dollars.
What remains to be understood
The first independent attestation of RedCoin’s reserves is scheduled for after the fourth quarter of 2026 and has not yet been completed. John O’Neill, Managing Director of digital assets and currencies at HSBC, announced the intention to extend the stablecoin to corporate and institutional wholesale use cases, but these features are not yet active. Additionally, plans to support subscriptions to tokenized investments remain in the design phase. On the competitive front, the launch of a joint dollar-denominated stablecoin by 21 banks, including Goldman Sachs and Bank of America, is planned for the first half of 2027.
Sources: CoinDesk, Decrypt, Cointelegraph.
This article is for informational purposes only and does not constitute financial advice or an investment recommendation.
* Content created with the assistance of artificial intelligence systems.