HSBC launches RedCoin stablecoin in Hong Kong

HSBC has launched RedCoin (RCHKD), a Hong Kong dollar-pegged stablecoin, through its PayMe platform. Within two days of its launch, the circulating supply reached approximately 80.81 million HKD, growing from an initial 1.27 million HKD a week prior. The stablecoin is backed 1:1 by cash reserves.

RedCoin is currently available to over 3.3 million PayMe users, allowing for peer-to-peer transfers and payments at more than 100,000 merchants. However, the ecosystem is currently a closed loop; the stablecoin operates on HSBC’s private, permissioned distributed ledger technology and is not connected to public blockchains. Furthermore, the RedCoin wallet in the PayMe app and the upcoming wallet in the HSBC HK App will not be interoperable, meaning users cannot transfer funds between the two.

Key limitations include the fact that RedCoin is not a protected deposit under the Hong Kong Deposit Protection Scheme and is restricted to existing HSBC customers. HSBC plans to expand functionality later this year by introducing a stablecoin wallet in its mobile banking app, which will allow customers to subscribe to tokenized investment products, such as money market funds.