HSBC to launch RedCoin stablecoin for over 3.3 million PayMe users from Friday

HSBC will begin introducing HSBC RedCoin, a Hong Kong dollar-backed stablecoin, to more than 3.3 million PayMe users in phases from Friday. The launch supports HSBC's effort to bring digital currencies into mainstream retail payments and investment in Hong Kong. Hong Kong is also seeking to become a digital asset hub. HSBC said the phased introduction would prevent excessive demand on the bank's servers. HSBC expects every PayMe user to have access before the weekend.

PayMe head Lawrence Li said HSBC RedCoin would be accessible exclusively through PayMe and HSBC's Hong Kong mobile banking app. Li said the initial services would cover transfers between users and payments to merchants on PayMe. Li said users could activate a RedCoin wallet without a minimum balance or account-opening requirements. Li said users could update PayMe and choose the wallet for instant transfers through an interface closely resembling the existing PayMe interface. Li said the first phase would prioritise reliable service, avoiding additional burdens for customers and earning customer trust.

Li gave no target for RedCoin circulation. Li said HSBC was optimistic about retail adoption following an internal pilot with nearly 100 employees. Li said the pilot successfully tested the complete customer process and demonstrated smooth integration and rapid adoption.

HSBC plans to complete RedCoin's integration with the bank's Hong Kong mobile banking app by year-end. The integration will enable customers to subscribe instantly to tokenised asset products, including money-market funds, with investments starting at HK$100 (US$12.75). HSBC managing director of digital assets and currencies John O'Neil said conventional investment settlement can require days. O'Neil said using a stablecoin to subscribe to tokenised funds enables immediate settlement and substantially reduces the investment threshold. O'Neil said gold tokens and funds from third parties would become available later. O'Neil said HSBC was exploring wholesale uses with designated partners and would announce details soon.

HSBC Hong Kong CEO Maggie Ng said HSBC began developing digital assets a couple of years ago by introducing tokenised bonds and gold. Ng said the market had widely accepted those products. HSBC said the bank had supported a cumulative US$8.3 billion in digitally native bond issuance worldwide. HSBC said tokenised gold had generated a cumulative US$2.5 billion in trading value since the product's introduction in Hong Kong more than two years ago.

Li said HSBC planned additional cashback incentives and promotions involving prominent shopping and dining brands to encourage stablecoin spending. Li said HSBC would announce further details soon. Li said initial merchant settlement schedules would match conventional Hong Kong dollar processing, allowing businesses to adopt RedCoin without additional investment. Li said future updates were expected to accelerate settlement. Li said RedCoin wallets would share the limits applied to existing fiat Hong Kong dollar wallets on PayMe, without another layer of restrictions.

Hong Kong's stablecoin ordinance entered into force on August 1 last year. The Hong Kong Monetary Authority, which serves as the city's de facto central bank, granted licences to HSBC and Anchorpoint in April. Anchorpoint is a joint venture established by Standard Chartered, Animoca Brands and HKT.