HSBC launches RedCoin on PayMe with permissioned transfers
HSBC launched its Hong Kong dollar stablecoin, RedCoin ($RCHKD), on October 23, 2026, through PayMe, reaching over 3.3 million users.
HSBC launched its Hong Kong dollar stablecoin, RedCoin ($RCHKD), on October 23, 2026, through PayMe. The bank's announcement states wallet activation will reach over 3.3 million PayMe users in the coming days. Customers can transfer RedCoin to friends and family and make payments at more than 100,000 merchants.
The stablecoin operates under specific restrictions: it runs on a permissioned blockchain, with private keys held by HSBC and transfers confined to permitted channels. RedCoin is denominated in HKD and regulated by the Hong Kong Monetary Authority. Importantly, holders earn no interest, and their token balances aren't protected under Hong Kong's Deposit Protection Scheme.
Bank-controlled token and ledger
RedCoin uses the ERC-20 standard on a permissioned Hyperledger Besu blockchain. Only allowlisted participant nodes can join the network. The terms restrict participation, transaction viewing, and submission to authorized people or entities. Holders can purchase, transfer, and redeem tokens only through HSBC's permitted channels.
HSBC holds customers' tokens in an omnibus wallet while recording each customer's entitlement separately on the relevant channel's ledger. The Coin Wallet displayed in the app reflects this entitlement, but the terms explicitly state the tokens aren't actually held inside the wallet customers see. HSBC retains the private key to the omnibus wallet.
The bank says it will not transfer, lend, pledge, re-pledge or otherwise use customer tokens except under customer instructions or as required by law.
Buying, paying and redeeming
Customers must meet HSBC's eligibility criteria and open a Coin Wallet before buying RedCoin. A purchase converts HKD already held in the relevant channel's wallet or account. For example, when a customer loads 1 RedCoin, HSBC debits HKD1 from that channel's HKD balance.
Merchants can receive either tokens or cash. If the recipient accepts RedCoin, HSBC completes the payment as a token transfer. If cash is required, HSBC converts the necessary RedCoin into HKD before completing the payment. HSBC commits to processing valid redemption requests instantly, and within one business day at most.
Reserve backing and insolvency
The agreement requires a reserve of money and other permitted assets worth at least the par value of all outstanding RedCoin. HSBC Institutional Trust Services (Asia) Limited serves as trustee, while HSBC acts as reserve custodian. The trustee holds the reserve pool in an account in its own name, with token holders as beneficial owners.
If HSBC becomes insolvent as reserve custodian, the trustee has an unsecured contractual claim against the bank for cash and a proprietary claim over non-cash reserve assets. Holders can direct the trustee to dispose of the reserve pool and redeem outstanding RedCoin pro rata, or claim against HSBC as issuer for any shortfall classified as unsecured debt.
PayMe first, investments later
The launch follows staff pilots involving nearly 100 users, which covered minting, wallet activation, and live transfers. PayMe is the first rollout channel, with wallet functionality scheduled for the HSBC HK Mobile Banking App later in 2026.
HSBC also plans to let customers use RedCoin to subscribe to tokenized investment products, including a forthcoming share class of its HKD money market fund. The announcement provides no specific opening date for this share class or the Mobile Banking wallet beyond 'later in 2026'.
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