HSBC unveiled its own stablecoin.
HSBC has officially announced that it will be launching its own stablecoin backed by Hong Kong Dollars. This will be called HSBC RedCoin with a launch date planned by the end of the year.
Additionally, the bank unveiled a stablecoin study conducted among its corporate clients and other financial institutions, with 74% of participants actively acknowledging benefits.
Recently, HSBC conducted tokenized deposit transactions with Citi as part of Swift’s ledger pilot. It has its own tokenized deposit service for large corporates like Ant International.
It was also 1 of 2 stablecoin license holders for issuance selected in Hong Kong by the Hong Kong Monetary Authority (HKMA), the other being Standard Chartered.
For a Global Systemically Important Bank (GSIB) such as HSBC, it remains to be seen how issuance and redemption operations are handled as RedCoin receives global client demand, which ultimately requires 1:1 reserves in HKD.
This is not the same model GSIBs are typically used to working with.
Are Banks the Right Issuers for Stablecoins?
More banks are showing interest in stablecoin issuance.
While Hong Kong is experiencing a surge in interest in local currency stablecoin issuance, with HSBC, Standard Chartered, and Anchorpoint all playing major roles, other regions are experiencing more nuanced stablecoin bank developments.
In Japan, banks like MUFG, Sumimoto, and Mizuho Bank revealed a joint stablecoin issuance for end of 2026/early 2027.
In Europe, a mixed discourse is evolving across jointly-issued Euro stablecoins, such as Qivalis. There are also national currency focused projects, such as the Swiss Stablecoin initiative.
Interestingly, the European Central Bank (ECB) released a statement calling for a change in the underlying stablecoin deposit reserve requirements as part of the MiCA framework.
Because banks typically lend out their deposits, and if stablecoin issuers hold a strong proportion of said reserves as cash deposits in banking institutions who have not experienced large redemption withdrawals at once, it may create financial instability risk.
In the U.S., local and regional banks part of State Banking Associations threw their support behind BankChain Alliance, which will be looking to integrate both tokenized deposits and stablecoins.
Larger international banks announced a joint U.S. Dollar stablecoin for 2027, while more infrastructure providers, such as Stablecore, continue to support with core and sidecore features.
Others chose tokenized deposit networks, including Cari and Hazel, as well the Clearing House.
Although for the Cari Network, as well as with SoFi’s SoFiUSD, there is a mechanism that swaps one for the other depending on where the transaction takes place (within the perimeter of the bank, or outside of it for sending and receiving transfers).
In Canada, 6 of the largest national banks have all stated their commitment to developing a tokenized deposit network, instead of opting to develop a joint stablecoin themselves.
Furthermore, there is a wave of banking charter applications in the U.S. being approved by the Office of the Comptroller of the Currency (OCC). This includes stablecoin-native companies, with 3 companies including Agora, Bastion, and Catena all receiving their conditional approvals.
This is particularly for requesting permissions to create newly formed subsidiaries as required under the Genius Act for payment stablecoin issuance, custody, and management activities.
The biggest difference is that a stablecoin issuer does not have the same lending and deposit taking ability from consumers as a traditional bank. Yet fully-reserved style stablecoin banks are too becoming more popular.
Newer models practised by N3XT Digital are evolving, with stablecoin bank Erebor in talks to raise more capital, while Augustus raised $180M and received its conditional OCC approval.
Column Bank also added USDT and USDC acceptance, primarily a tech-focused and founder-friendly, API style banking platform.
In general, how one bank’s stablecoin can be exchanged for another is a completely new landscape, which is where stablecoin clearing suddenly becomes very important.
