The Hongkong and Shanghai Banking Corporation Limited

What was announced

On 10 April 2026 the Hong Kong Monetary Authority (HKMA) granted The Hongkong and Shanghai Banking Corporation (HSBC) one of the first two stablecoin issuer licences under the Stablecoins Ordinance (Cap. 656), licence number FRS02 (HKMA register; Regulatory Wire). The same day HSBC said it would launch a Hong Kong dollar stablecoin in the second half of 2026, fully backed by high-quality liquid assets in segregated accounts. The first phase would cover peer-to-peer payments through PayMe and the HSBC HK App, payments to merchants through PayMe, and, subject to regulatory approval, subscriptions to tokenised investments through the HSBC HK App.

How it works

HSBC’s white paper for RedCoin (ticker RCHKD), dated 23 October 2026, describes “a private, permissioned blockchain network operated on an EVM-based (Ethereum Virtual Machine) ledger platform” (Part E). HSBC runs every validator node inside its own infrastructure, with no outside participation, and the white paper’s glossary names QBFT, a Byzantine fault tolerant consensus protocol, as the consensus mechanism. A private network running Ethereum’s execution environment gives ledger as private-evm. RedCoin is an ERC-20 smart contract with minting, burning, whitelist, blacklist, freeze and pause functions held by HSBC operator roles.

Holders keep RedCoin in a stablecoin wallet inside PayMe or, later, the HSBC HK App. The two wallets are separate and RedCoin cannot move between them. Onchain, HSBC as custodian holds all holders’ RedCoin in one omnibus wallet and records each holder’s entitlement in its internal records; the white paper says holders keep ownership (Part B, item 12). Any PayMe user who meets the channel’s eligibility criteria can activate a wallet, so access is open. RedCoin is a stablecoin issued and redeemable 1:1 for Hong Kong dollars by a licensed issuer, so settlement is stablecoin. The token is the stablecoin itself and the omnibus wallet is a custody arrangement, so legal is native. HSBC states that RedCoin is not a protected deposit.

Record so far

HSBC named the stablecoin on 30 September 2026 and launched it on PayMe on 23 October 2026, after staff pilots with nearly 100 users. HSBC says more than 3.3 million PayMe users can activate a wallet “in the coming days” and pay friends and family or more than 100,000 merchants. That meets the launch claim. The HSBC HK App wallet is marked “coming soon”, so the second claim is open, and tokenised investments, starting with a share class of HSBC’s Hong Kong dollar money market fund, are planned for later this year.

HSBC publishes reserve figures daily. On 27 October 2026 it reported HKD 81,425,493.24 in circulation, reserve assets of HKD 82,425,493.24 held in cash, and a seven-day increase in circulation of HKD 80,157,394.18 (HSBC). The first independent attestation is expected after the fourth quarter of 2026. The white paper commits to attestations at least quarterly, published on HSBC’s website, and to redemption at par within one business day, with no fees for now. Ongoing payments by PayMe users, with circulation rising by HKD 80 million in a week, give repeat scale; four days of figures are too few for sustained. The stage is pilot while the wallet is still being opened to PayMe users in phases.

For Ethereum

Hong Kong’s two licensed stablecoins share a contract design and differ in who runs the validators. Anchorpoint’s HKDAP is an ERC-20 token on Ethereum mainnet with whitelisted wallets and freeze and blacklist functions. RedCoin is an ERC-20 token with whitelist, blacklist and freeze functions on an EVM chain where HSBC runs every validator. In September the Regulatory Wire noted that stablecoin settlement of tokenised funds would start on Ethereum unless HSBC issued on a different chain, and HSBC has done so.

For now, Hong Kong’s two licensed stablecoins cannot reach each other’s holders. The white paper describes a closed loop in which every holder, sender and recipient of RedCoin is an HSBC customer (Part D). HKDAP moves only between whitelisted Ethereum wallets, so the city has two closed pools of licensed Hong Kong dollars.

HSBC calls the design “future-ready for public blockchain connectivity, subject to HKMA approval”, with transaction monitoring through blockchain analytics, and says the EVM platform gives compatibility “across private and EVM-compatible public blockchain environments” (Part E). The RedCoin contract would need no rewrite to run on Ethereum or an EVM layer 2. The HKMA’s approval and the omnibus wallet stand in the way: holders have no onchain address of their own today, so a public-chain transfer would need HSBC to move tokens from its omnibus wallet to a wallet the holder or another custodian controls. HSBC plans wholesale uses for corporate and institutional clients (HSBC), which are the likeliest first users of such transfers. That reading rests on inference.

What to watch

The HSBC HK App wallet would meet the second claim, and the money market fund share class the third. The end of the phased rollout and the first quarterly attestation would support a move to production. HKMA approval for public-chain connectivity, or transfers to wallets outside HSBC, would change access and the “For Ethereum” reading.