HSBC RedCoin brings stablecoin payments to PayMe

HSBC launched RedCoin, its first stablecoin, on PayMe in Hong Kong on 23 October, opening a phased route for more than 3.3 million users to send digital Hong Kong dollars and pay merchants. HSBC says users will activate a wallet inside the app to send RedCoin to friends and family, or pay at more than 100,000 merchants through PayMe.

RedCoin has the ticker RCHKD and is denominated in Hong Kong dollars. The HSBC launch announcement says the token is licensed and regulated by the Hong Kong Monetary Authority and designed to meet the financial crime controls required by Hong Kong’s Stablecoins Ordinance. HSBC Digital Assets Custody provides safekeeping for the token. The announcement does not specify a blockchain or token contract.

How do PayMe users send and spend RedCoin?

Users first activate a stablecoin wallet in PayMe. They can then send RedCoin instantly to friends and family, or use it to pay merchants through PayMe. The bank says wallet activation will roll out over the days following launch, so the full user base does not gain access at once. HSBC tested the customer journey with a staff pilot of nearly 100 people, covering minting, wallet activation and live transfers.

The process keeps the payment inside an app many users already use. It works like adding another balance and payment route to PayMe: the wallet holds the stablecoin, and PayMe carries the transfer or merchant payment. The South China Morning Post’s launch report says users can activate the wallet without a minimum balance or opening an additional account.

What can users do with RedCoin after launch?

The first uses are peer-to-peer transfers and payments to merchants. HSBC says it plans to add RedCoin wallet functionality to its Hong Kong mobile banking app later this year. It also plans to let customers use RedCoin to subscribe to tokenised investment products, including a forthcoming share class of the bank’s Hong Kong-dollar money market fund. Those services are plans, not part of the PayMe launch described by the bank.

HSBC’s rollout puts a licensed, bank-issued stablecoin into a large retail payment app. The immediate test is whether customers use the in-app wallet for everyday transfers and purchases. The launch announcement confirms the wallet, payment routes and potential reach; it does not name the network RedCoin runs on or describe a route for using it outside HSBC’s apps.

Source material

• HSBC launch announcement — about.hsbc.com.hk
• South China Morning Post’s launch report — scmp.com