HSBC RedCoin stablecoin launches for 3.3 million PayMe users in Hong Kong

HSBC will launch its Hong Kong dollar-backed stablecoin in stages from Friday for more than 3.3 million users of its PayMe app, as the bank pushes to bring digital currencies into the city’s mainstream retail and investment markets.

HSBC RedCoin, available only through PayMe and the bank’s Hong Kong mobile banking app, would initially support peer-to-peer transfers and peer-to-merchant payments on PayMe, according to head of PayMe Lawrence Li.

Users can activate their HSBC RedCoin wallet, with no minimum balance or account-opening requirements. After updating the app, they can select the wallet to make instant transfers through an interface highly consistent with the current PayMe experience, he added.

“The key priority in the first phase is ensuring stable service, avoiding extra burdens for customers and winning their trust,” Li told reporters ahead of Friday’s launch.

The head of PayMe did not disclose a circulation target but said HSBC was optimistic about retail adoption after completing an internal pilot involving nearly 100 staff members. The trial successfully tested the full customer journey and showed smooth integration and quick user adoption, he added.

HSBC plans to fully integrate the stablecoin into its Hong Kong mobile banking app by year-end. It will allow customers to instantly subscribe to tokenised asset products, including money-market funds, with a minimum investment of HK$100 (US$12.75).

“Traditional investment settlement can take days, but subscribing to tokenised funds through a stablecoin enables instant settlement and significantly lowers the threshold,” said John O’Neil, managing director of digital assets and currencies at HSBC.

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Gold tokens and third-party funds would follow, O’Neil said, adding that HSBC was also exploring wholesale applications with designated partners and that details would be announced soon.

“We began our digital asset journey a couple of years ago, launching tokenised bonds and tokenised gold, and [it] is widely accepted by the market,” said Maggie Ng, CEO of HSBC Hong Kong.

So far, HSBC had supported the issuance of a cumulative US$8.3 billion of digitally native bonds globally, while tokenised gold – introduced more than two years ago in Hong Kong – had reached a cumulative traded value of US$2.5 billion, the bank said.

Now, to encourage spending with the stablecoin, HSBC planned to introduce additional cashback rewards and promotions at well-known shopping and dining brands, with further details also to be announced soon, said Li, the head of PayMe.

In the first phase, merchant settlement schedules would align with those used for conventional Hong Kong dollar processing, allowing businesses to adopt the service without additional investment. Settlement speeds were expected to increase in future updates, Li said.

The stablecoin wallet would share existing limits with standard fiat Hong Kong dollar wallets in PayMe, without an additional tier of restrictions, he added.

HSBC said it would roll out the new service to all PayMe users in stages from Friday to avoid overwhelming its servers, with full coverage expected before the weekend.

Hong Kong’s stablecoin ordinance took effect on August 1 last year. HSBC and Anchorpoint, a joint venture formed by Standard Chartered, Animoca Brands and HKT, were granted licences from the Hong Kong Monetary Authority, the city’s de facto central bank, in April.