HSBC launches Hong Kong dollar stablecoin on PayMe

More than 100,000 merchants can accept RedCoin through the platform.

HSBC has launched its first stablecoin, HSBC RedCoin (RCHKD), on its PayMe payment app in Hong Kong, allowing users to make digital payments to individuals and merchants.

Licensed and regulated by the Hong Kong Monetary Authority (HKMA), HSBC RedCoin is pegged to the Hong Kong dollar (HKD).

It uses HSBC’s technology and security systems and is designed to meet the financial crime control requirements of Hong Kong’s Stablecoins Ordinance.

More than 3.3 million PayMe users will be able to activate a stablecoin wallet through the app in the coming days. They will be able to send stablecoins instantly to friends and family and pay at more than 100,000 merchants that accept payments through PayMe.

An HSBC survey found that access through existing apps, faster payments and quicker settlement were amongst the main factors driving stablecoin adoption.

The survey also found that 53% of respondents believe HKD stablecoins could improve Hong Kong’s economic competitiveness by enabling round-the-clock payments and supporting trade, tourism and cross-border commerce.

Maggie Ng, HSBC’s CEO in Hong Kong and head of retail banking and wealth in the city, said the bank aims to help customers adapt to changes in digital payments through products backed by its security and banking capabilities.

Ahead of the launch, HSBC worked with regulators and prospective users to test the service. Nearly 100 staff took part in pilot tests covering the customer journey, including creating stablecoins, activating wallets and making live transfers.

HSBC plans to add stablecoin wallet functionality to its HSBC HK Mobile Banking App later this year.

It also intends to allow customers to subscribe to tokenised investment products using HSBC RedCoin. These will include a new share class of the bank’s existing Hong Kong dollar money market fund.

John O’Neill, HSBC’s managing director of digital assets and currencies, said the bank plans to expand RedCoin into wholesale corporate and institutional services.

HSBC Digital Assets Custody provides safekeeping services for RedCoin. To mark the launch, the bank will offer exclusive PayMe transaction discounts alongside RewardCash.