HSBC's stablecoin comes amid signs of industry demand

• Key insight: HSBC has launched a new stablecoin in Hong Kong. 
• Forward look: The bank is starting with P2P payments, but will add more functions amid signs of demand for stablecoins among businesses.

As banks slowly move toward issuing stablecoins, research suggests rampant interest in the digital asset, particularly among larger businesses.
Cross-border payment fintech Payoneer surveyed 265 senior payments, treasury and finance leaders at U.S.-based e-commerce marketplaces, platforms and enterprises with $100 million or more in annual revenue, reporting 97% are using, testing or still evaluating stablecoins. Within that group, 69% are actively supporting stablecoins in real operations.

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And among organizations using or piloting stablecoins, 50% report faster settlement, 41% cite better access to markets and currencies and 40% report an improved payment experience.

"It's more about how than why when it comes to stablecoins," Rowland Berry, vice president of stablecoins at Payoneer, told American Banker. "It's about 'how do I embed the stablecoin?'"

Bank stablecoins

As Payoneer tracks stablecoin demand among users, banks are moving forward on both stablecoins and tokenized deposits.

Twenty-four of the largest 50 banks have tokenized deposits "on their radar" as of the first quarter, up from 19 the prior quarter, according to American Banker research on digital assets. That compares to the 17 banks that have stablecoins on their radar, up from 15 in the fourth quarter of 2025. "With the hype, there's been a lot of discussion, but there are people finding value," Berry said.

Among banks, HSBC's stablecoin strategy last week progressed by launching RedCoin for public use. The coin is available in Hong Kong through HSBC's PayMe P2P network, covering about 3.3 million users. RedCoin is regulated by the Hong Kong Monetary Authority, and is backed by Hong Kong dollars.

The bank did not comment by deadline, but in a release said it would add investment, corporate and institutional use cases for its stablecoin. Other banks are also working on stablecoins. BNY, Huntington Bank, Citizens Bank, U.S. Bank, American Express, Visa, Mastercard, Stripe and Coinbase are among a group of companies that are backing a new stablecoin venture called Open Standard.

Open Standard will issue a dollar-backed stablecoin, Open USD, later this year. Adyen, Affirm, Klarna, Chime, Google, Capital One's Brex, Standard Chartered, Nuvei, Ramp, Marqeta, Shopify and Remitly are also part of the endeavor.

While stablecoins are rarely used for payments, Open Standard's participants are anticipating demand, particularly for cross-border transactions involving challenging currency exchanges. While the Genius Act created a runway for banks to pursue stablecoins, more regulatory certainty is needed in order for banks to move faster into stablecoins, according to Berry.

"Regulatory is at the top of the list for further adoption," Berry said. "There's still so much uncertainty as to what's acceptable and unacceptable, and if people feel comfortable using stablecoins more broadly."

What's next?

The striking takeaway from Payoneer's research is the relative lack of process improvements,

according to Alenka Grealish, senior analyst at Celent, noting that improvement metrics in Payoneer's survey were less than half.

"This signals to me that a majority of survey respondents have not yet optimized their use of stablecoins," Grealish told American Banker. "Programmability, which is a key differentiator of stablecoins and tokenized deposits relative to traditional payments, has yet to be meaningfully tapped."

And there's also a divergence between using stablecoins for payments versus using them to improve transaction processing, which payment experts say is the more likely use in the long term.

"The primary use case for stablecoins over the short and intermediate term will be for cross border and remittance payments," Tony DeSanctis, vice president at Cornerstone Advisors, told American Banker. "Most other payment types have viable low-cost solutions that fill the need and address the use case, such as real-time payments, same day ACH and cards."

Since there will potentially be many stablecoins and tokenized deposits, interoperability may be a large impediment to adoption.

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"We're not talking about a singular stablecoin, or a single tokenised deposit. We're talking about hundreds of each," Gareth Lodge, a senior analyst at Celent, told American Banker. "Stablecoins may be baked into a solution like Stripe, and so many clients may not even be aware where they are using a stablecoin. Or, care. Do you care whether you're using a Visa or Mastercard? Or do you care if it works, where you need it to, and at a cost reasonable to you?"
But the explosion of choices will make achieving that hard in the short-term, according to Lodge. "Everyone thinks their stablecoin is the best, meaning they are all competing to be the winner," Lodge said.