HSBC launched its Hong Kong dollar stablecoin, HSBC RedCoin ($RCHKD), on October 23, 2026, through PayMe. The bank’s launch announcement says wallet activation will reach over 3.3 million PayMe users in the coming days. Users will be able to transfer RedCoin to friends and family and make payments at more than 100,000 merchants.
The RedCoin terms set the operating restrictions: a permissioned blockchain, private keys held by HSBC and transfers confined to permitted channels. The token is denominated in HKD and regulated by the Hong Kong Monetary Authority. Holders earn no interest. Neither their token balances nor pending transactions have protection under Hong Kong’s Deposit Protection Scheme.
A bank-controlled token and ledger
RedCoin uses the ERC-20 token standard on a permissioned Hyperledger Besu blockchain. Only allowlisted participant nodes can join the network. The terms restrict participation, transaction viewing and submission to authorised people or entities. Holders can purchase, transfer and redeem tokens only through HSBC’s permitted channels. These details come from the product terms; they have not been verified through an independent inspection of a contract or public-chain transaction.
HSBC holds customers’ tokens in an omnibus wallet and records each customer’s entitlement separately on the relevant channel’s ledger. The Coin Wallet displayed in the app reflects that entitlement. The terms expressly say the tokens are not actually held or custodied inside the wallet customers see in the app. HSBC retains the private key to the omnibus wallet.
The custody agreement limits how HSBC can use those tokens. 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. The permitted instructions include transfers and redemptions. HSBC’s control of the private key sits within those contractual limits on its use of the holdings.
A transfer takes effect when HSBC records it on the channel’s ledger. Ownership passes to the recipient at that point. The terms prohibit transfers across different permitted channels, explicitly including transfers between a customer’s PayMe Coin Wallet and Mobile Banking Coin Wallet. Although the agreement covers both channels, it does not promise that customers will be able to move tokens between them.
Buying, paying and redeeming
Customers must meet HSBC’s eligibility criteria and open a Coin Wallet before they can buy RedCoin. A purchase converts the HKD balance already held in the relevant channel’s wallet or account. The terms give a direct example of the conversion: when a customer loads a wallet with 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 the recipient requires cash, the bank converts the necessary RedCoin into HKD or the relevant payment currency before completing the payment. In that case, the customer redeems tokens to fund a cash payment; the merchant need not receive RedCoin.
HSBC commits to processing a valid redemption request instantaneously and, in any case, within one business day. The bank deducts the specified token amount and credits the equivalent HKD balance, after applicable fees, to the customer’s wallet or account on the same permitted channel. That timing commitment applies to valid requests. The agreement directs customers to separate disclosures for the detailed conditions and fees.
Suspension of access to an HSBC channel, or its wallet or account, automatically suspends access to the Coin Wallet and the ability to buy or redeem, to the extent permitted by law. Customers therefore need access to the underlying app account to use those functions. The terms also ask customers to report unfamiliar transfers or errors immediately. After 90 days, HSBC says it may be unable to take action on the transaction.
What backs the redemption claim
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 is the trustee, and HSBC is the reserve custodian. The trustee holds the reserve pool in an account in its own name. Token holders are the beneficial owners, to the value of their holdings.
As issuer, HSBC manages the reserve pool, receives its income, including interest and capital gains, and bears its losses. Holders receive none of that income through the token. The terms also explicitly separate both RedCoin and the Coin Wallet from a bank account. The agreement describes a reserve trust and a redemption right as holder protections; the holdings are not insured deposits.
The insolvency provisions treat cash and other reserve assets differently. 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. The trust arrangement leaves the trustee exposed to HSBC as custodian through that unsecured claim on the cash portion of the reserves.
If HSBC becomes insolvent, holders can direct the trustee to dispose of the reserve pool and redeem outstanding RedCoin pro rata. They can also claim against HSBC as issuer for any shortfall in the proceeds. The risk disclosures classify that shortfall claim as unsecured debt. HSBC separately warns that difficulty liquidating reserves could delay or prevent redemption within the stated timeframe, particularly under exceptionally heavy demand.
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. The announcement schedules wallet functionality in the HSBC HK Mobile Banking App for later in the year.
HSBC also plans to let customers use RedCoin to subscribe to tokenised investment products, including a forthcoming share class of its HKD money market fund. The launch announcement gives no opening date for that share class or the Mobile Banking wallet beyond later in 2026.
