HSBC launched its first Hong Kong dollar stablecoin on October 23 with something most crypto projects spend years trying to build: an audience of millions.
RedCoin, or RCHKD, arrived inside PayMe, HSBC’s established payment app, with a phased rollout designed to bring the token to more than 3.3 million users over the following days, allowing them to send the digital token to friends or spend it across a network of more than 100,000 merchants. No unfamiliar crypto exchange or separate blockchain wallet is required.
But there was another number hiding behind the launch announcement.
On the same day RedCoin became publicly available, HSBC reported HK$80.58 million in stablecoins already circulating. Nearly HK$79.32 million of that amount represented a net increase over the preceding seven days.
That sounds like a substantial head start for a product entering the retail market.
There is just one problem: the publicly available figures tell us how much RedCoin exists, but almost nothing about how people are actually using it.
And a closer examination of HSBC’s technical documentation reveals why answering that question may be considerably harder than it looks.
The HK$79 Million Question
According to HSBC’s official launch announcement, RedCoin is initially available for person-to-person transfers and merchant payments through PayMe. The bank plans to introduce additional functionality through its mobile banking application, including subscriptions to tokenized investment products.
HSBC also disclosed that nearly 100 staff members had participated in pilots testing the customer journey, including token creation, wallet activation, and live transfers.
That provides useful context for what appeared on the bank’s public transparency dashboard.
As of October 23, HSBC reported HK$80,581,048.16 in RedCoin circulation, supported by HK$81,581,048.16 in reserve assets, all reported as cash. By October 24, the circulating supply had increased to HK$80,669,211.52, up HK$88,163.36 from the previous day’s snapshot. Ravel’s calculations below use the October 23 launch-day figures.
The reported reserves exceeded circulating liabilities by exactly HK$1 million.
Based on those figures, Ravel calculates a reserve coverage ratio of 101.24%. This is consistent with a reported reserve buffer above the token’s nominal outstanding value, although HSBC’s first independent reserve attestation is not expected until after the fourth quarter of 2026.
The more interesting figure sits immediately below it.
HSBC reported a seven-day net circulation increase of HK$79,318,300.96.
Subtracting that increase from the current supply gives an implied circulating balance of HK$1,262,747.20 seven days earlier.
In other words, 98.43% of RedCoin’s reported circulating value on launch day was equivalent to the net supply added over the preceding week.
That is not a trivial change.
Yet it does not prove that HK$79.32 million flowed into RedCoin from newly activated retail customers.
Circulating supply measures outstanding tokens at a particular moment. It does not reveal how many people own those tokens, how often ownership changes, or what those tokens have been used to buy.
A single holder could account for a large portion of the outstanding supply. Alternatively, the same value could be distributed across thousands of accounts.
Both situations could produce the same headline circulation figure.
The public dashboard does not distinguish between them.
Nor does the net increase disclose the gross value of tokens created and redeemed during the seven-day period. It tells us how much the outstanding balance changed, not everything that happened along the way.
That distinction matters because an increase in supply is not the same thing as an increase in payment activity.
For a stablecoin designed to facilitate everyday transactions, the second measure may ultimately be more informative than the first.
The Merchant Network Has a Catch
HSBC’s ability to introduce RedCoin through PayMe offers a genuine distribution advantage.
Most new digital payment products must persuade consumers to download an application, register an account, and find someone willing to accept the new payment method.
HSBC already operates the network.
But the existence of more than 100,000 participating merchants introduces a second measurement problem.
What exactly does it mean for a merchant to accept RedCoin?
The answer becomes clearer in HSBC’s RedCoin Terms and Conditions, particularly Sections 5.1 and 5.2.
The agreement describes two possible payment arrangements.
If a recipient accepts RedCoin, the payment can be completed through a transfer of the stablecoin.
But if the recipient requires payment in ordinary money, HSBC can convert the customer’s RedCoin into Hong Kong dollars before completing the transaction. The conversion effectively constitutes a redemption of the token.
Consider a customer purchasing lunch through PayMe.
The customer could fund the payment using RedCoin, while the merchant ultimately receives HKD rather than a stablecoin balance.
From the customer’s perspective, the transaction may feel almost identical to an ordinary mobile payment.
From an adoption standpoint, however, those are two different outcomes.
One involves a merchant receiving digital tokens. The other involves a stablecoin being used as the funding source for a conventional currency payment.
Neither is inherently superior. In fact, the second arrangement may be precisely what makes RedCoin convenient: merchants do not necessarily need to change how they receive money.
But the distinction becomes important when evaluating the size of the stablecoin’s actual payment ecosystem.
A network of 100,000 merchants capable of accepting payments funded by RedCoin is not necessarily a network of 100,000 merchants holding or settling in RedCoin.
HSBC has not publicly disclosed what share of merchant transactions follows either route.
Without that breakdown, the merchant figure establishes distribution reach, not the extent of direct stablecoin adoption among businesses.
A Blockchain That Cannot Be Read Like a Public Blockchain
There is another unusual aspect of RedCoin.
Although it follows the ERC-20 token standard familiar to Ethereum users, it does not currently operate as a freely accessible token on Ethereum’s public network.
Section 15 of HSBC’s contractual documentation identifies Hyperledger Besu as the underlying blockchain implementation, using a permissioned network and the QBFT consensus mechanism.
Only authorized participants can access the network and view or submit transactions.
The bank’s 23-page RedCoin whitepaper, dated October 23, goes further.
It states that HSBC operates the validator nodes without external participation. The stablecoin is integrated with the bank’s custody and transaction-processing infrastructure, and customer tokens are held collectively through an omnibus wallet.
HSBC maintains internal records identifying each customer’s individual entitlement.
That arrangement has practical benefits.
The bank can apply identity verification, transaction monitoring, sanctions controls, and recovery procedures within infrastructure it manages.
Customers also retain ownership rights to their RedCoin holdings under the documented custody arrangement.
But the architecture creates a substantial limitation for outside researchers.
On a public blockchain, an analyst can generally examine token transfers, wallet balances, and the movement of funds between addresses. That information still does not reveal the exact number of individual users, particularly when exchanges or custodians aggregate balances.
With RedCoin, even the underlying transaction history is not publicly accessible in the same way.
HSBC controls access to its permissioned network, while it tracks individual customer entitlements through internal records.
The contractual documentation also specifies that transfers take effect when recorded on the relevant HSBC channel’s ledger.
What the documents do not clearly establish is whether every individual PayMe payment produces a corresponding ERC-20 blockchain transaction or whether some customer-level movements are recorded and reconciled through the bank’s internal systems.
Those mechanics matter.
If individual payment events and blockchain transfers do not correspond one-to-one, even access to aggregate blockchain transaction counts would require careful interpretation.
There is no evidence in the reviewed documents that HSBC is concealing transactions improperly. The closed-network structure is part of the product’s stated design.
But it means researchers cannot independently reconstruct RedCoin’s payment activity using the techniques commonly applied to public blockchain stablecoins.
To understand actual usage, they would need additional disclosures from HSBC.
Hong Kong Already Has a Different Model
RedCoin is not Hong Kong’s only licensed stablecoin.
Anchorpoint Financial, backed by Standard Chartered, Animoca Brands, and HKT, has also introduced its Hong Kong dollar stablecoin, HKDAP.
The two products have different market-entry strategies. HSBC is integrating RedCoin into an established retail payment application, while Anchorpoint’s initial rollout targets authorized distributors and institutional or corporate users.
That makes a direct comparison of commercial performance premature.
Their transparency approaches, however, are already distinguishable.
According to Anchorpoint’s public dashboard, HKDAP had HK$6.11 million in circulation as of October 21, supported by HK$7.21 million in reported reserves.
Its dashboard also disclosed cumulative transaction volume of HK$35.10 million, alongside HK$8.75 million issued and HK$3.65 million redeemed over the preceding 30 days.
Those figures fail to establish how many people actively use HKDAP, and they do not prove that every recorded transfer represents a payment for goods or services.
Trading, treasury movements, and transfers between financial intermediaries can all contribute to token activity.
Nevertheless, the disclosure provides information that HSBC’s RedCoin dashboard does not currently offer: a reported measure of transaction throughput.
Anchorpoint also identifies its HKDAP smart contract on Ethereum mainnet, allowing researchers to independently examine the token’s public blockchain activity.
That does not make HKDAP more successful than RedCoin.
Its cumulative transaction volume covers a different period, its distribution model is different, and its circulating supply is considerably smaller.
What the comparison demonstrates is that two licensed Hong Kong dollar stablecoins can operate under the same regulatory framework while offering substantially different levels of public visibility into transaction activity.
One exposes a public blockchain record and publishes transaction-volume figures.
The other currently offers public disclosure of circulating supply and reserves, while the underlying transaction network remains permissioned.
Neither publicly reports a comprehensive, independently verified count of active individual users.
For evaluating real adoption, that missing denominator remains important.
Reserve Transparency Is Not Usage Transparency
There is a regulatory explanation for at least part of this difference.
The Hong Kong Monetary Authority’s Guideline on Supervision of Licensed Stablecoin Issuers places significant emphasis on reserve backing, redemption arrangements, and independent verification.
Section 2.7 addresses disclosure of reserve composition and value, outstanding stablecoin supply, and external attestations.
It also establishes expectations for reporting to the regulator and updating publicly available information.
The provisions reviewed by Ravel do not explicitly require issuers to publish the number of active stablecoin users or the value of retail merchant payments.
That is an important boundary.
The absence of those metrics from HSBC’s dashboard is not, by itself, evidence of regulatory noncompliance.
Nor does it indicate a reserve shortfall. HSBC’s reported reserve assets exceed its outstanding RedCoin liabilities.
The issue is instead one of measurement.
Reserve transparency helps answer whether an issuer reports sufficient backing for the tokens it has created.
Usage transparency answers a different question: whether those tokens are moving through the economy in ways that demonstrate demand for the product.
A stablecoin can be fully backed and still see limited adoption.
It can also experience substantial transaction activity without that activity necessarily representing widespread use by individual consumers.
Neither outcome can be inferred from circulating supply alone.
HSBC appears aware that adoption will depend on more than distribution.
In a customer survey published in September, 74% of respondents identified at least one potential stablecoin use case, yet only 60% correctly described the underlying concept.
The survey covered 1,060 HSBC customers, not RedCoin users, and cannot be treated as a forecast of actual adoption.
Still, it highlights another challenge.
Even with millions of potential users already inside PayMe, HSBC must give people a reason to choose RedCoin over the payment methods they already understand.
The bank’s planned integration with tokenized investment products may eventually provide that reason. Its initial promotional discounts and rewards could also encourage experimentation.
Whether those incentives translate into repeated, economically meaningful stablecoin usage is a question that only subsequent activity data can answer.
The Numbers That Would Settle the Debate
RedCoin launched publicly on October 23. It would be unreasonable to judge its long-term adoption from its first day.
HSBC has already accomplished something meaningful by embedding a regulated stablecoin into a major consumer payment platform.
The distribution advantage is real.
So is the reported HK$80.58 million in circulation.
But neither tells us how much of that supply is held by external customers, how many wallets contain positive balances, or how often people choose to transact with the token.
Three disclosures would make the picture considerably clearer.
First, HSBC could publish the number of customers who have activated RedCoin wallets, alongside the number holding positive balances and the number completing transactions over defined reporting periods.
Second, it could disclose gross issuance and redemption volumes separately from net changes in circulating supply.
Third, it could distinguish payments settled in RedCoin from those converted into HKD before reaching merchants.
Those figures would allow analysts to measure the difference between distribution, ownership, and economic activity without exposing individual customer identities.
They would also make the product easier to evaluate against its promise of improving everyday payments.
For now, the question is not whether HSBC has built a legitimate stablecoin or whether its customers will eventually adopt it.
The available evidence is insufficient to settle the latter question, and the launch is far too recent to draw a conclusion.
The more revealing fact is that HSBC can report the exact value of RedCoin in circulation to two decimal places while leaving the public without comparable information about the payments taking place behind that number.
Hong Kong now has a bank-issued stablecoin with access to millions of users. What it does not yet have is a public measure of how many of them are actually using it.
Ravel Research Methodology
This analysis uses HSBC’s October 23, 2026 launch announcement, its same-day stablecoin transparency disclosures, RedCoin’s whitepaper and contractual terms, Anchorpoint’s October 21 transparency snapshot, and HKMA supervisory guidance.
Using HSBC’s publicly disclosed figures, Ravel calculated RedCoin’s implied circulating supply seven days earlier by subtracting the reported seven-day net change (HK$79,318,300.96) from reported current circulation (HK$80,581,048.16), producing HK$1,262,747.20.
The seven-day net increase represents 98.43% of current circulation. Reported reserve coverage was calculated by dividing HK$81,581,048.16 in reserve assets by outstanding circulation, producing 101.24%.
These calculations measure reported outstanding value and its change, not unique users, payment volume, or external customer purchases. HSBC’s figures are issuer disclosures rather than independently reproduced on-chain observations. Anchorpoint’s transaction volume is cumulative and is not directly comparable with RedCoin’s seven-day supply change. Neither data set establishes the number of active individual users.
HSBC was contacted for clarification on RedCoin’s circulating supply, transaction activity, and merchant settlement arrangements. No response had been received by publication time.
